Top 1000 World Banks - Indian lenders dominate NPL and worst profits lists

Asset quality metrics have, on balance, remained relatively stable in the 2019 Top 1000 World Banks ranking. Across the board there has been little change, with most categories more or less matching the 2018 edition in terms of the key numbers. One notable difference stems from the higher degree of market diversity in the 2019 ranking. In the highest disclosed non-performing loans (NPL) table, for instance, five southern European banks feature alongside lenders from four other jurisdictions. In the 2018 edition, seven banks from southern Europe featured alongside institutions from South Africa and India.

In the 2019 ranking the State Savings Bank of Ukraine tops the table with an NPL ratio of 52%. In a distant second is the Trade Bank of Iraq with a ratio of 36.9%, while another Ukrainian lender, PrivatBank, is in third position in the table with an NPL ratio of 34.1%. Only one bank remains the same from the top five in the 2018 ranking, which is South Africa’s African Bank, coming in at position number four. The lender has an NPL ratio of 34%, signifying a reduction of almost nine percentage points between the two rankings.

Four Greek lenders occupy positions five through to eight in the NPL table but each of them has reduced its ratio of NPLs in the 2019 edition by a small margin. Indeed, Attica Bank, which comes in 13th, is the only Greek lender to have recorded an increase to its NPL ratio in the ranking. This points to the incremental progress being made in some quarters of the Greek banking sector to improve asset quality, although there is a long way to go before the system as a whole reduces NPLs to a meaningful extent.

Meanwhile, Indian banks once again feature prominently in the NPL table. In the 2019 ranking 11 lenders from the country feature, up from the nine that were present in the 2018 edition. This is a testament to the difficulties facing the Indian banking sector as it attempts to address pressing asset quality issues that stem from a credit boom experienced between 2006 and 2011. The highest placed Indian lender in the 2019 NPL ranking is IDBI, in position nine, with NPLs to total loans of 27.4%. It is followed by UCO Bank in 11th with NPLs of 25%. The remaining Indian banks occupy positions 15 and 17, while also rounding out the table from places 19 to 25.

Looking to the worst profit performance, Indian lenders once again feature heavily. IDBI tops the table with a loss of $3.28bn. In second position is Germany’s Norddeutsche Landesbank. The remaining banks, from positions three to 10, with the exception of Portugal’s Novo Banco in ninth place, also hail from India. The country’s public sector banks, in particular, have seen their profitability hit in recent times as they have been forced to onboard loan loss provisions.

In the table of the lowest Bank for International Settlements (BIS) capital ratios, Japanese lenders occupy all 10 places. Saikyo Bank tops the list with a ratio of 7.8% while the Bank of Saga is not far behind in second place with 7.9%. The remaining institutions in positions three through to 10 have ratios in the 8% range. All of the Japanese lenders featured are domestically focused banks. This segment of the country’s banking sector has experienced an increase in risk-weighted assets in recent times, while phasing in Basel III requirements has also affected their capital positions.

Meanwhile, the lowest capital-to-assets ratio table is a much more diverse affair. Banks from five different jurisdictions feature, with Germany’s Norddeutsche Landesbank topping the ranking with a ratio of 2.3%.

Highest Disclosed Non-Performing Loans (% Of Total Loan Book)

Lowest BIS Total Capital Ratios (%)

Worst Profit Performance

Lowest Return On Capital

Lowest Capital-To-Assets Ratios