A journey through western Europe’s top international financial centres (IFCs) by bank profitability is a rollercoaster of hopeful highs and dire lows, as the region’s lenders have taken diverse paths over the past year.
Despite similar macroeconomic and regulatory environments, some hubs have performed much better than their neighbours, either in terms of total aggregate size of pre-tax profits or because of notable improvements in year-on-year profits.
Paris leads the table with $31.16bn in aggregate pre-tax profits for the banks headquartered there, according to their 2015 annual statements, a 40% improvement on the city’s previous financial results. However, London, Stockholm and Madrid, which follow immediately after, have all seen profits shrink.
Barcelona surprises
Madrid is Spain’s leading IFC but Barcelona, much smaller in bank profit terms and ranked at number 28, has experienced an impressive 182% pre-tax-profits growth – the second highest in the table. The Catalan hub is home to previously loss-making CaixaBank, which made it back into the black in 2014 and almost doubled pre-tax profits in 2015.
Italy offers another interesting example, with Turin ahead of better-known IFC Milan because of the opposite income movements at banks based in the two cities. In Turin, Intesa Sanpaolo’s pre-tax profits have expanded by 25% to $4.53bn, while in Milan, Unicredit’s figure halved to $2.31bn, contributing to the hub’s 29% decline in aggregate pre-tax profits.
Montrogue is France’s second best IFC, ranked fifth overall, thanks to Crédit Agricole’s size and strong performance. Meanwhile, Iceland’s Reykjavik has the highest return on assets at 4%, and Turkey’s Ankara the highest return on capital at 21%.
Only data for banks included in The Banker’s Top 1000 World Banks ranking was considered.
