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Best-performing banksSeptember 1 2014

Top 250 EU banks ranking, 2014: A tale of two halves

This year's EU banks ranking shows how selective the region's economic recovery has been, with Greek and Spanish lenders edging into the black, while Italian, Irish, Portuguese, Slovenian and Cypriot institutions are continuing to struggle.
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Top 250 EU banks ranking, 2014: A tale of two halves

The usual players once again top The Banker’s top 250 EU banks ranking – banks from western Europe – while the highest ranked institution from central and eastern Europe is Polish state-owned PKO Bank Polski, which sits in 56th place with $6.51bn of Tier 1 capital.

The top bank in Europe is HSBC, which holds on to its top position for the fourth year in a row. The UK bank increased its Tier 1 capital by 4.71% to $158.16bn, and also leads the rankings by pre-tax profits and assets. France’s largest bank, BNP Paribas, slightly decreased its Tier 1 capital to $99.17bn but still retained its position as the second largest bank in the region, while Barclays jumped up three positions to third on the back of a $11.85bn increase in capital. It also recorded a huge 1117.71% improvement in profits.

Other positive stories in the top 10 include France's Crédit Agricole (fourth place) and the UK’s Lloyds Banking Group (ninth place), both of which have turned from making losses to making profit. The UK's Lloyds, however, slipped down two spots in the ranking by Tier 1 capital following a 6.86% decrease in its capital.

Polish Bank Gospodarstwa Krajowego’s jump from 160th position to 97th in this year’s ranking, owing to its 291.8% capital increase, was not related to a bail-out or recapitalisation – as was the case at many of the institutions that saw their Tier 1 capital increase dramatically – but rather to capital enhancement exercises, including the sale of its 10.25% stake in PKO Bank.

Sunny side up in Spain

After Spain's banks struggled in last year's top 250 EU banks ranking, performance has improved in 2014, with only Catalunya Caixa left in the top 10 tables for highest losses and lowest return on capital. In last year's ranking, both tables were dominated by Spanish names, with six and seven of the top 10s, respectively, hailing from Spain.

Bankia is a positive example of the recovery that is taking place in the country. The Spanish banking conglomerate underwent a recapitalisation in 2013, which puts it into the top 10 Tier 1 capital increases table. It also turned around from making a loss last year, to recording a $1.63bn profit in this year's ranking. There are several other such turnaround stories in the capital increase table, including Greece's Alpha Bank and Piraeus Bank Group.

Spanish and Greek banks showed aggregate turnarounds from losses to profits of $12.72bn and $2.41bn, respectively, while Italy, Ireland, Portugal, Slovenia and Cyprus are still reporting aggregate losses.

High losses in Italy

Italian banks reported the highest total loss – $34.43bn – among all countries, with a negative return on capital of 18.85%. Therefore, it is no surprise that four of the five banks with the highest losses are Italian – headed by giant UniCredit’s negative $22.03bn result. The country’s largest bank by assets also saw an 8.56% decrease in capital, which made it lose one spot to place 10th in the ranking by Tier 1.

Intesa Sanpaolo (ranked 15th), which last year reported the ninth highest pre-tax profit in Europe at $3.85bn, recorded a $6.63bn loss and is the third worst performing bank in Europe, behind the UK’s RBS, which reported its fifth pre-tax loss in a row. RBS's $14.6bn-worth of losses came alongside a 5.65% contraction in capital, which made the bank drop from third to sixth position in the overall EU ranking.

The bank with the overall highest NPL figure is the recapitalised Bank of Cyprus, with 47%, closely followed by the soon-to-be-restructured Abanka Vipa (44.23%), which also posted the second highest drop in return on capital at -142.37%.

Slovenia's slog

Abanka Vipa exemplifies the ongoing problems in Slovenia's banking sector, which are further highlighted in this year’s ranking. The country’s banks account for four of the places in the top 10 lowest return on capital in the EU table. Slovenia’s largest bank, Nova Ljubljanska Banka, ranked 114th in the overall European ranking, posted pre-tax losses of $1.89bn, a negative 114.47% return on capital and the second highest negative return on assets in the ranking at -10.96%. It was second in this measure behind the second largest Slovenian bank, Nova KBM’s (156th), which posted a -13.69% return.

On a country aggregate level, Slovenia's return on capital has significantly contracted from last year’s -34.95% to -100.8%. This was by far the highest contraction across the European ranking, as was the country's aggregate return on assets, -9.3% on its $3.29bn of total assets and $3.32bn of pre-tax losses.

The highest return on capital figures, with percentages of more than 50%, are still recorded by Italy's Banca Mediolaunum and Banca Generali. Banks from Latvia, Malta and Home Credit in the Netherlands (36.33%) also feature in the top 10 by this measure.

Top 250 EU banks ranking tables
Top 250 EU banks ranking tables 2

The Banker's Top EU banks ranking, 2014 originally appeared in the September 2014 issue of the magazine. The full results of the ranking are available on The Banker Database. Find out more about the database, register for a free trial or subscribe today.

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