In short, the long-established strength of the developed economies is in decline and emerging economies are slowly taking their place. As the number of EU(27) banks falls to 266 from 279 last year and US banks slip to 169 from 185, Asian banks rise to 184 from 174 while the Middle East participants rose to 97 from 93 and Latin American banks increased to 47 from 42. The financial landscape is shifting and the subprime crisis is reinforcing the change.
In terms of the main performance ratios, the four years of high growth in the profits on capital ratio came to an end and the 2008 ranking showed a decline to 20.0% from the record 23.4% last year.
Similarly, the profits to assets ratio took a dive, dipping to 0.85% from a high of 1.06% last year. And examining the core average Tier 1 capital to assets ratio, this year the soundness ratio dipped to 4.23% from 4.53% last year. This latest capital:assets ratio is the lowest in more than 10 years.
