The global importance of western European banks is continuing to decline after the overall Tier 1 capital in the largest 25 institutions fell for a second year running.
Data for the 2016 ranking saw a reduction in capital in the top 25 and while eight institutions increased their capital base year on year, this only amounted to a combined total of $15.23bn – Deutsche Bank alone, the top lender with the highest reduction in capital, saw its level fall by $14.26bn and by one position in the European ranking to seventh. This comes on the back of heavy losses of $6.63bn in its fiscal 2015 data and a 14.6% reduction in assets.
But even banks that increased their capital have seen their growth dwarfed by other regions, with all but three Top 25 western European banks – the UK's HSBC and Standard Chartered and Dutch ABN Amro – dropping in the overall ranking.
However, in the case of banks with euro-denominated results, the ranking was also affected by a foreign exchange impact: the euro saw about a 10% reduction in the exchange rate value from €0.82 per $1 in the 2015 ranking to €0.92 per $1 this year.
HSBC is still the leading western European bank and remains the only European institution in the global top 10, with a slight increase in capital of $564m to $153.3bn. Its sits in ninth place globally.
Highest movers included Greece’s Attica Bank, which increased its Tier 1 capital by 79.08%, and Piraeus Bank Group, with 22.93%, after Greece’s banks needed to be recapitalised as a condition of the country’s international bailout. Three Italian banks also boosted their capitalisation.
The ranking for the highest return on capital (ROC) is dominated by banks with a focus on asset management and private banking, such as Italy’s Banca Generali, which reported by far the largest ROC of 62.01%. Italy's Banca Mediolanum and the UK’s Schroeders and Close Brothers, which were among the leading western European banks for ROC in the 2015 ranking, take spots two to four.