Top 1000 World Banks - European bank results reveal their mettle
Europe’s banks survived the pandemic, even extending support for their respective economies. But there is still scope for improved profitability and consolidation in future.
Europe’s leading banks have weathered an unprecedented global health and economic crisis relatively well. The Banker’s Top 1000 World Banks ranking 2021 reveals that most of the region’s lenders have maintained healthy capital and liquidity positions despite the prolonged nature of the difficulties they have endured. This, in large part, reflects the fact that the region’s financial institutions have worked hard to strengthen their balance sheets in recent years.
Beyond the numbers, however, it is also worth noting the outsized role that Europe’s banks have played in supporting businesses, households, health services and community groups, through the darkest hours of the Covid-19 pandemic. Many lenders provided much-needed financial donations to key public and private actors on the front lines of the crisis, while national banking systems stepped up to disburse government assistance in order to keep economies afloat.
HSBC stays on top
In terms of the bigger picture in western Europe, HSBC maintains its number one position in the regional top 25 banks table. With a Tier 1 capital position of $160.2bn, the bank maintains its dominant position in the region, while climbing the global ranking by one place to reach eighth overall.
French lenders Crédit Agricole and BNP Paribas maintain both their regional rankings, by securing second and third places in western Europe respectively, even as both banks enjoy considerable increases to their Tier 1 capital. Combined with the presence of Crédit Mutuel and Société Générale, placing ninth and 10th in the region respectively, French banks once again dominate the western European ranking.
The tie-up between Italy’s Intesa Sanpaolo and UBI Banca, which occurred midway through 2020, has seen Intesa Sanpaolo rise up the rankings by a sizeable degree. In the 2021 edition, the Italian lender secures eighth position in the region and 29 in the world with Tier 1 capital of $72.3bn. This is a big improvement on the 2020 ranking, when the bank placed 15th in the region and 39th in the world.
Meanwhile, central and eastern European (CEE) lenders also fare quite well in the Top 1000 World Banks Ranking, even if their Tier 1 capital growth is lower than their western European counterparts’. Russian banks dominate the highest positions and Sberbank easily secures the top spot with Tier 1 capital of $65.9bn. A notable change in the top five banks is the rise of Poland’s PKO Bank Polski, which jumps a place to third position in the region from fourth place in 2020. Three Russian banks also feature among the CEE region’s leading lenders for return on capital: Tinkoff Bank, Novikombank and Sovcombank attain second, fourth and fifth position respectively.
While banks across western Europe and the CEE might have endured the worst of the Covid-19 pandemic, the crisis has shone a light on many of their existing weaknesses. For one, profitability in some of the largest banking markets in the west of the region remains low, while across the wider continent there is substantial scope for consolidation. Looking ahead, Europe’s banks will need to adjust to a post-pandemic world quickly if they are to secure their prospects in the longer term.
