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Top 1000 World Banks – A more positive picture for Japan's banks

Almost all the leading Japanese lenders have moved up the ranking thanks to strong growth in Tier 1 capital, while its three mega-banks continue to dominate the country ranking.
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Though Japanese banks showed little growth or even a decline in Tier 1 capital in the 2015 World Banks ranking, this year its lenders have performed much better. All top 25 Japanese banks by Tier 1 capital have improved their standings in the global Top 1000 World Banks ranking, save for Mitsubishi UFJ Financial Group, which retains 10th place, and Aozora Bank, which fell from 241st to 286th.

Japan

In the country ranking, there have been no great changes at the top. The three mega-banks have held onto the three top spots. Mitsubishi UFJ Finance Group is still on top, but its year-on-year Tier 1 capital growth in its 2015 results, from $117.6bn to $131.8bn, was far larger than the $400m increase registered in 2014.

Sumitomo Mitsui Financial Group holds fast in second place. Its Tier 1 capital grew by $9bn to $80.1bn in 2015 after a $354m drop a year earlier.

Even Mizuho Financial Group, which remains in third place, registered year-on-year Tier 1 capital growth from $62.4bn to $70.2bn.

Meanwhile, the bottom half of the country ranking has shifted somewhat. Aozora Bank has dropped from 15th place to 23rd after its Tier 1 capital fell from $4.2bn to $3.3bn, year on year, in 2015. In contrast, Iyo Bank has moved up one place to number 17 thanks to an increase in Tier 1 capital of $588m, which takes its overall volume to $4.3bn.

The number of banks qualifying as 'highest climbers' in 2016 in Japan is a further sign of stronger Tier 1 capital growth across the country’s banking sector. In the 2015 ranking only three banks qualified as highest climbers, but in the 2016 ranking, this number rose to 10. And if in 2015 the biggest mover, Norinchukin Bank, registered a Tier 1 capital increase of 1.88%, in 2016, top mover Shinkin Central Bank recorded about 15 times that figure, with Tier 1 capital growth of 28.37%.

Among Japan’s top five banks by return on capital, Kyushu Financial Group takes the top spot with return on capital of 21.05% – 11.26 percentage points less than the 32.31% reported by Tokyo TY Financial Group, when it led this ranking in 2015.

There is only one new Japanese entrant in the 2016 Top 1000 World Banks ranking – Kyushu Financial Group, with $5bn in Tier 1 capital.

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