Top 1000 World Banks - Western Europe bounces back as global soundness continues to improve

After seeing contractions across all capital adequacy indicators in 2017’s soundness rankings, western European banks’ performance has seen a strong recovery this year. The region has posted a 15.1% increase in average Tier 1 capital and a 10.2% increase in total assets. This is especially good news for the global banking industry, as western Europe holds the largest amount of Tier 1 capital across the world.

However, despite the region’s average capital assets ratio (CAR) increasing from 5.26% to 5.49%, western European banks still lag their North American and Chinese counterparts, which have an average CAR of 7.97% and 7.09%, respectively.

The Top 1000 world banks have seen an overall strengthening in capital adequacy. Globally, the average Tier 1 capital has risen by 11.7% year on year, while total assets have increased by almost 9%. Aggregate CAR has also increased, from 6.5% to 6.66%.

The main driver of growth remains China, with an aggregate Tier 1 capital increase of 19.7%, and a 14.4% rise in total assets. North American banks, on the other hand, have underperformed, posting a 1.7% rise in Tier 1 capital and a 4.7% growth in total assets. Latin America and the Caribbean is the only region that saw a contraction in both aggregate Tier 1 capital (-19.5%) and total assets (-27.5%) year on year.

For the past three years running, Bahrain’s First Energy Bank has finished at the top of the CAR ranking. In this year's ranking its ratio is 73.15%, an increase from 60.3%. It is also the second year in a row that it is the sole bank with a CAR above 50%. In addition, after dropping out of the Bank of International Settlements’ capital ratio table in the 2017 ranking, it made it into the top five this year, with a ratio of 54%.

Aggregate indicators by region (%)

Top 25 by capital to assets ratio

Top 25 by BIS capital ratio