Developing world enjoys best return on assets
It comes as little surprise to see emerging economies such as Kenya and Indonesia leading return-on-asset rankings, though China's relatively low scores may raise a few eyebrows.
With banks from emerging markets showing healthier profits in general than those in developed countries, it is not surprising that this pattern is repeated in tables showing return on assets (RoA).
Kenya’s Equity Bank heads the African table with an impressive 7.44% return on assets, with compatriot Cooperative Bank of Kenya in fifth place with 4.96%. On this score, Cooperative Bank of Kenya has a stronger ratio than any of the fifth-placed banks in the other regional and country tables listed.
Indonesia’s banking sector is noted for its strong profit growth and unsurprisingly Bank Rakyat Indonesia and Bank BTPN top the Asia table (excluding China and Japan) with RoA figures of 4.33% and 4.21%, respectively.
China, however, provides something of a contrast to the trend of strongly performing emerging markets. Its top bank by this measure, Taizhou, only manages a 2.89% RoA. In China, banks are characterised by large asset bases, and while their profits may be large in absolute terms, in relation to their size the figures are often more modest.
Japan has the poorest results of the examples given here, while US banks appear to perform well but this may be more down to the unique circumstances of the particular banks in the ranking than anything else. Franklin Resources is an investment manager, for example, rather than a conventional bank. Bank of America, by contrast, third placed in the Top 1000, has an RoA of just 0.14%.
The Europe table reveals yet more emerging market outperformance. Three of the top five are Turkish banks, while the leader is Home Credit of the Netherlands, which is an emerging market consumer finance operation.
