The Banker’s Top 300 European Banks listing sees HSBC trumped and a new leader emerge.

A major change has occurred this year at the top of The Banker’s listing of the Top 300 European banks by Tier 1 capital. Crédit Agricole has taken over the top spot from HSBC Holdings, largely through its mid-2003 merger with Crédit Lyonnais. HSBC has topped these annual listings since 1995 but Crédit Agricole remains primarily a domestic bank when compared to most of its immediate regional peers such as HSBC, Deutsche and ABN AMRO – all of whom have well in excess of 50% of their total assets domiciled outside their domestic market. The list this year has a familiar look, with only minor changes through domestic consolidation. Some banks were active in acquisition among the smaller institutions in central Europe, while major acquisitions were outside the region. In Germany, Landesbank Schleswig Holstein merged with Hamburgische Landesbank to form HSH Nordbank (at 36); in Norway, DnB NOR (at 44) was formed from the merger of DnB Group with Gjensidige NOR (formerly Union Bank of Norway); in Italy, Banca Popolare di Bergamo-Credito Varesino merged with Banco Popolare Commercio e Industria to form Banche Popolari Unite (at 63); and in Iceland, Bunardabanki Islands and Kaupthing Bank came together to form Kaupthing Bunardabanki (185). Major cross-border mergers in Europe, particularly within the EU, continue to be rare – although Santander Central Hispano’s current bid for Abbey, if successful, may be the signal for increased activity of this nature, provided local regulators are not a stumbling block. There were also welcome signs of long-overdue consolidation in the German savings bank sector, as it faces the reality of increasing non-performing loans, with at least 12 smaller banks undergoing mergers. New entrants Among the newcomers this year are Hypo Real Estate Holding (49), Landesbank Sachsen Girozentrale (122), Volkswagen Bank (137) from Germany, and Vontobel Holding (190) and Cornèr Bank (246) from Switzerland. Hypo Real Estate Holding is the parent of Hypo Real Estate Bank, Württembergische Hypothekenbank and Hypo Real Estate Bank International, mortgage banks that were spun off from HypoVereinsbank in late 2003. The aggregate pre-tax profit of the Top 300 grew 50% over the previous year, compared with the meagre 1.3% growth the previous year. This was achieved on the back of continued growth in the consumer loan market, particularly mortgages, and the increased strength of European currencies against the dollar. Germany, with 57 banks in the Top 300, recorded an aggregate pre-tax loss of $66m mainly due to the large scale of losses at HypoVereinsbank, Commerzbank, Dresdner, WestLB and to a lesser extent, Bankgesellschaft Berlin. Of the major German banks, only Deutsche Bank recorded a significant profit, and that was some 22.3% down on the previous year. Elsewhere, UK banks delivered an aggregate pre-tax profit of $49.7bn from 25 banks, up from $35.6bn the previous year (28 banks), despite Abbey National posting a $1.2bn loss. In France, the aggregate grew to $28.8bn from $19.2bn a year earlier. Aggregate Tier 1 capital grew from $884.1bn to $1110.2bn, an increase of 25.6%, while aggregate assets also grew by 24% from $22,737.0bn to $28,186.5bn. Germany again had the highest representation in the Top 300, with 57 banks, followed by Spain 42, Switzerland 32, Italy 30 and the UK 25. Others (48) consisted of: Andorra three, Cyprus three, Greece seven, Ireland five, Liechtenstein three, Portugal seven, Russia nine and Turkey 11.

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