While the Asia-Pacific region's growth story over the past few decades has been powered by Japan and then China, at least as far as banking is concerned, when these two countries are removed from The Banker's Asia-Pacific rankings, it is Australia's banks that come to the fore. 

Australian banks dominate the Asia-Pacific banking landscape when China and Japan are taken out of the equation. As well as performing strongly in terms of Tier 1 capital, banks form the country also feature prominently in The Banker's top 15 profits table.

The Banker has covered the rankings for China and Japan in previous issues (September 2011 for China and December 2011 for Japan), showing how the growth in China's banking sector has extended beyond the ‘big four’ to the smaller banks in towns and cities outside Beijing and Shanghai. Meanwhile, the top 100 ranking for Japanese banks showed how the Asian growth story has evaded the country's financial services providers in recent years, with unremarkable increases in profitability and returns being recorded almost across the board.

Japan’s banks, however, still score highly in The Banker's Top 1000 World Banks ranking. This, combined with the clout of China, means that banks in other countries in the Asia-Pacific region are often overshadowed. Australia is such a market, and once China and Japan are taken out of the equation, their strength becomes apparent.

On top down under

Australia’s largest banks feature in the top five of The Banker's ranking for the top 300 Asia-Pacific banks (excluding China and Japan). Drawing on data from their year-end at the end of September 2011, National Australia Bank (NAB), ANZ Banking Group and Westpac Banking Corporation were placed first, second and third, respectively, in the rankings, which are ordered by Tier 1 capital.

Should China and Japan's banks be included in this ranking, NAB’s Tier 1 capital figure of $34.18bn would be dwarfed. By comparison, in The Banker's Top 1000 World Banks ranking, Japan's Mitsubishi UFJ Financial Group was fifth in the world with a Tier 1 capital of $119.73bn, followed by Industrial and Commercial Bank of China in sixth place, with a Tier 1 capital of $113.39bn. The Tier 1 capital of Australia's banks, at approximately one-quarter of the size of the largest Japanese and Chinese banks, seems paltry by comparison.

In the top 300 Asia-Pacific ranking, the only non-Australian bank to make it into the top five of the ranking is foreign-owned subsidiary (FOS) HSBC Hong Kong. The ranking for the top-performing FOSs is dominated by banks from Hong Kong. Bank of China Hong Kong comes second behind HSBC Hong Kong, while Hang Seng Bank Hong Kong ranks fifth.

HSBC Hong Kong also tops the profits table, with pre-tax profits of $9.29bn. After HSBC Hong Kong, it is the Australian banks that feature prominently in the profits ranking. Westpac, ANZ, Commonwealth Bank and NAB are ranked from second through to fifth place, respectively, for profits. Though NAB is the top bank in The Banker's top 300 Asia-Pacific rankings (excluding China and Japan), it trails behind its Australian peers where profits are concerned.

Bangladeshi profit

When it comes to profits on average capital, however, it is the Bangladeshi banks that are the most notable performers. In the top 15 profit on average capital (PAC) table, 16 of the banks are from Bangladesh. Janata Bank tops the PAC table with profits on average capital of 91.52%, followed by National Bank, also of Bangladesh, with profits on average capital of 86.41%.

After Australia, South Korea’s banks have performed well and rank highly in the main ranking for Asia-Pacific. Woori Financial Group is in eighth place, switching places from the 2011 ranking with KB Financial Group, which is now in ninth.

Also featuring prominently at the top end of the Asia-Pacific rankings are the Singaporean banks, which also top the Association of South-east Asian Nations (Asean) tables. In overall ranking for Asia-Pacific, DBS Bank has kept its sixth place from the 2011 ranking, while in the Asean table DBS Bank is ranked first, followed by its Singaporean rivals OCBC and UOB.

Trailing in the wake of the Singaporeans in Asean is a mix of Malaysian and Thai banks. Compared to the relative size of its economy and the potential of the market, Indonesian banks do not yet feature prominently in the rankings. Bank Mandiri is the highest ranked Indonesian bank, coming 11th in the Asean table and 48th in the overall ranking.

Country aggregates and averages


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