The two top Chinese banks, ICBC and Bank of China, are now ranked seventh and ninth in The Banker’s Top 1000 World Banks 2007 listing, and the fourth of the big beasts, Agricultural Bank of China (ranked eighth in Asia and 65th in the world) is yet to have a balance sheet makeover and IPO to join the other three at the top of the list.
Looking closer at the 31 Chinese banks in this year’s Top 1000, their Tier 1 capital/assets ratio has risen to a strong 5.64% from 3.83% last year. The 27 Indian banks in the ranking do slightly better with 5.74%, and the strongest country in the region in terms of capital/assets ratios is Singapore, whose three banks have a marginally improved ratio of 7.26%.
As for basic profitability (pre-tax profits on capital), the 14 South Korean banks in the Top 1000 provide the highest return at 20.72%, down from 23.82% the previous year. This is followed by an improved performance from the Singaporean banks, at 19.91%, and the Indian banks, at 18.28%. Taiwan’s 34 banks, averaged out, produced virtually no profits at all and a return of just 0.11%.
Examining the Top 25, the three Chinese giants are followed by the three Australian heavyweights and this structure looks set to continue for some time unless the South Korean banks can put on a spurt. There are seven Koreans in the Top 25, led by Kookmin Bank, followed by six Chinese, four Australians, three Singaporean and three Taiwanese banks.
Curiously, India, which has 27 banks in the Top 1000, 18% of the world’s population and 2% of the world’s GDP, has only two banks in the Top 25, State Bank of India (Tier 1 capital of $9981m) and ICICI Bank ($4293m), and they are relatively small compared with the other leading Asian banks. For the 13th largest economy in the world, India has relatively small banks.TOP 25: ASIA ($M)
