It has become something of a cliché that China's banks are the biggest and beefiest in Asia, dominating the top 25 Asian banks ranking in recent years. Perhaps more interesting, however, is the Asian ranking without China's heavyweights.
In the normal Asia ranking, which includes China but excludes Japan, Australia has traditionally been the second strongest country, with 17.9% of the Tier 1 capital aggregate of the top 25 Asian banks. When China is removed from the ranking, Australia naturally shuffles to the top, taking the top four spots. Similarly, South Korea, also a strong performer in the Asian ranking in recent years, rises on a relative basis too.
What is more striking, however, is that adjusting the ranking to exclude China reveals the relative strength of countries previously crowded out by the colossus:
Taiwan and Malaysia, with three banks each, and Thailand, an entirely new entrant in the top 25 Asian ranking with two banks, all put in a credible performance.
Even more revealing, however, is matching each country's performance in the ranking with its economic output. When adjusted to exclude China, the diminutive stature of India's banks is starkly underlined: despite being the second largest economy in Asia (excluding Japan), India gains just one extra bank, accounting for just three of the Top 25 Asians and only 10% of the aggregate Tier 1 capital.
To put this into perspective, India claims the same number of players among the adjusted top 25 Asian banks ranking as the much smaller economies of Singapore, Malaysia and Taiwan, whose combined economic output can claim to equal just half that of India. The Banker's Top 1000 data has long shown Indian banks to be sluggish relative to India's position in the region. The real surprise is that removing China does very little to flatter India, whose banking sector evidently remains underdeveloped and badly in need of consolidation.
Top 25: Asia excl China and Japan ($m)
Top 25: Asia excluding Japan ($m)
Highest movers: Asia excl Japan ($m)
