Pre-tax profits across the world’s Top 1000 banks in The Banker’s 2017 ranking have fallen compared with figures from the 2016 ranking – if only by $2bn to about $1068bn.
Starting from a low base, the share of pre-tax profits of western European banks in the ranking has further decreased. Banks from the region have shed 2.78 percentage points compared with The Banker’s last ranking, leaving western European banks with only 12.91% of global profits. This is largely due to aggregate losses by banks in Greece, Italy and Portugal, and lower profits recorded by banks in Germany, Switzerland and the UK.
The only western European institution in the top 25 banks by return on capital (ROC) is newcomer OneSavings Bank.
While lower profits in China and Japan cause Asia-Pacific’s share of profits fall for the fourth year in a row, banks from the region nevertheless account for 46.03% of the overall profits (compared with last year’s 48.28%). India’s Bandhan Bank has the region’s highest ROC with 96.21%, while another four banks from Asia-Pacific are among the top 25 banks by ROC.
Where western Europe and Asia-Pacific have lost, Latin America has gained 2.57 percentage points of the global profit share to reach 7.07%, as Brazilian banks have turned a corner. All but five banks out of 20 in the country have increased their profits in this year’s ranking and Banco Bradesco is one of the most profitable globally, with ROC of 40.51%.
Ten banks from Latin America are in the top 25 by ROC – although, as was the case last year, The Banker excluded banks from Venezuela from the ROC table, as their inclusion would distort results due to extreme differences between official exchange rates and the black market. Venezuelan banks are included in the aggregate figure, however.
Central and eastern European banks, which have in the past ranking faced a significant hit to earnings, have also registered an improvement this year. On aggregate the banks have 1.86% of the overall share compared with last year’s 0.49% and move past African banks for the first time since 2014’s ranking. The turnaround comes as only three banks in the whole region are now recording losses and thanks to a markedly better performance by Russian banks (two are in the top 25 by ROC).
For the second year in a row, North American banks have improved their share of profits (by 1.29 percentage points to 26.21%), and the shares of the Middle Eastern and African banks remain stable.
