Little has changed among the leading western European banks over the course of the past year, despite the best efforts of the region's authorities.
In the wake of the financial crisis, authorities throughout Europe have been keen to promote more competition and encourage new entrants into the banking sector. On the evidence of this year’s top 25 banks from western Europe ranking, their efforts are meeting with little success – at least not at the top of the table.
The top 14 banks in the table are in exactly the same positions as they held in the 2012 ranking with the only change of any significance being the $11.46bn or 8% increase in HSBC’s Tier 1 capital as the bank seeks to comply with new capital requirements.
Other banks in the ranking have undertaken similar if less dramatic capital increases, meaning that the 25th bank in the ranking (ABN Amro, the same bank which occupied the position last year) holds $20.71bn this year compared to $19.86bn in 2012.
Things look as negative in terms of new competition in the lower half of the table. The only new entrant is Norway’s well-established DNB Group, which replaces Belgium’s KBC Group. KBC’s capital fell by 7.64% in 2012 and in the Top 1000 ranking it dropped 10 places to 71.
Restructuring and rescues have had an impact on the positions of European banks. Dexia’s recapitalisation by the French and Belgium governments gave it second spot among western Europe's highest movers but it remains a much smaller entity than before its troubles.
Greece’s Piraeus Bank (the fourth highest mover) has been recapitalised by the Hellenic Financial Stability Fund and in the course of Greek banking sector restructuring has taken over the local assets of a number of foreign subsidiaries, such as those of Laiki and Bank of Cyprus, Millennium BCP of Portugal and Société Générale’s Geniki Bank.
Eurobank Ergasias used to be Luxembourg-held and therefore counted as a foreign-owned subsidiary in our rankings, but is now a new entrant from Greece following its takeover by the Hellenic Financial Stability Fund.
Consolidation in Swiss private banking has also made its presence felt in our results. At the end of 2011, a controlling stake in Sarasin was bought by the Safra Group, a Brazil-based family-owned bank, making it the highest mover among all banks in the Top 1000. Also, Julius Baer bought Bank of America’s Merrill Lynch wealth management businesses in four regions in South America and Europe, elevating the bank to 10th position in the western Europe highest mover rankings.
