US banks make up almost half of newcomers

More US banks entered The Banker’s Top 1000 list for the first time in 2022 than from any other nation. The US saw nine new banks, while Bangladesh registered three, Vietnam has two and the remaining countries present in the table – Australia, China, Iran, Italy, the Netherlands, Sweden and Uzbekistan – have one a piece.

China’s only entry, Hefei Science and Technology Rural Commercial Bank, is the highest new entry, jumping into the Top 1000 at 684th, with a growth of 14.4% in Tier 1 capital to $1.381bn.

Iowa-based Stark Bank Group led the US pack, entering the Top 1000 in 892nd position, increasing its Tier 1 capital by 12.5%. It was followed by Nicolet Bankshares in 972nd, which increased its Tier 1 by 56.9%; Industry Bancshares in 974th, with a Tier 1 uptick of a more modest 11.6%; and People’s Bank in 980th, with a growth of 40.5%. Allegiance Bank, Educational Services of America, People’s Bancorp, First Bancshares and Stock Yards Bancorp round up the other banks, all with healthy double-digit growth in Tier 1.

This US group has witnessed several mergers and acquisitions (M&A) over the past year, which has helped the merged entity leapfrog other banks in the Top 1000. And more M&A is on the cards in the US. For example, the Federal Reserve Board has approved Stock Yards Bancorp’s proposed acquisition of Commonwealth Bancshares and indirectly acquire its subsidiary bank, Commonwealth Bank & Trust Company, both in Louisville, Kentucky this February. Allegiance Bancshares received regulatory approval to merge with CommunityBank of Texas in June 2022. First Bancshares Corp also completed its acquisition by MidWestOne Financial Group in the same month.

Bangladesh had a strong showing in the new arrivals introducing three banks to the ranking. BRAC Bank came in 891st in the Top 1000, with an impressive 54.2% increase in Tier 1, Sonali Bank in 944th with 14.3% growth, and National Bank eking into the Top 1000 in 998th, with a 1.1% rise in Tier 1.

BRAC recently launched a digital payment awareness programme for cattle farmers and traders in Chuadanga District in the west of the country. The programme aimed to create awareness among the farmers and traders about the benefits of digital transactions in cattle markets during the holiday Eid al-Adha. Usually, transactions take place in cash, leaving the scope of theft, counterfeit notes and other mishaps which inflict significant loss to the buyers and sellers.

The only other country with multiple banks on the new arrivals list is Vietnam with SeABank, reporting a 30.4% uplift in Tier 1 capital, coming in 921st overall. LienVietPostBank has placed 975th in the Top 1000, with 12.5% growth.

SeABank recently issued 136 million shares to its existing shareholders at a rate of 10.13% to raise the charter capital. The increase is a part of SeABank’s development plan and orientation, enabling it to expand its operational network, invest in facilities and technology, improve the quality of its operations, and diversify its products and services to better meet the needs of customers across the country.

New arrivals

On the up

The remaining six banks are split between six countries. Of these, the highest-ranking new arrival is Sweden’s Nordax Bank, which entered in 716th with a whopping 204.3% increase in Tier 1 capital. It acquired Bank Norwegian for NKr19.6bn ($2.01bn) late last year.

Aegon Bank in the Netherlands, which joined the ranking in 860th place, actually saw a 4.3% drop in Tier 1. This May, it sold its 50% stake in the Spanish insurance joint venture with Liberbank to Unicaja Banco. The sale follows the change of control in Liberbank after its merger with Unicaja Banco in 2021. Aegon’s insurance joint venture with Liberbank dates back to 2008, when Aegon established a joint venture in Spain with Caja Cantabria, which was one of Liberbank’s predecessors.

Australia’s Judo Bank enters in 890th position, more than doubling its Tier 1 to $755m. A lender to small and medium-sized enterprises, the bank recently announced it will start testing how new customers would handle interest rates three percentage points higher than current levels, up from its current buffer of two percentage points. The bank’s CEO, Joseph Healy, is on record saying he is worried about what could go wrong in the economy when highly indebted households face higher interest rates and a weaker housing market, as the bank moves to test new borrowers more cautiously.

Uzpromstroybank increased its Tier 1 by 6.8%, securing it 994th place. Last year, Uzbekistan’s largest lender announced its aim to go private by 2023. As part of this plan, the International Finance Corporation opened a $75m credit line to one of the oldest state-owned banks in the country. As part of the privatisation process, the bank’s supervisory board is to be revamped; it will add five new independent members with international banking experience.

Rounding out the six, Italy’s Mediocredito Centrale ranked 822nd, with a Tier 1 rise of 6.7%, and Mehr Iran Bank from Iran sits in 883rd, recording a slight rise in Tier 1.

Return to the ranking

In addition to new arrivals, 28 banks from 19 countries reappeared on the Top 1000 ranking after a short absence. Two Argentinian banks re-emerged in the ranking, benefitting from moving to IFRS accounting standards — a change in accounting rules that has boosted the Tier 1 capital of all Argentinian banks tracked by The Banker Database. Banco de la Ciudad de Buenos Aires arrived back in the ranking in 914th and Banco de San Juan in 973rd spot.

Five US banks returned to the Top 1000 list. Dime Community Bancshares re-enters in 782nd position, following its merger with Bridge Bancorp last year. The other four banks — Live Oak Bank in 923rd, Happy Bancshares in 978th, Intrust Financial Corp in 982nd and FB Corporation in 988th — were too small to be featured in the ranking last year.

The two other banks from the Americas re-entering the ranking were from Columbia, with Banco GNB Sudameris coming in at 941st and Banco Agrario de Colombia ranking 971st. The only Caribbean bank to rejoin is Maduro & Curiel’s Bank in the Netherlands Antilles, in 991st spot.

Iran also had a strong showing, with three banks returning to the global ranking. Bank Mellat re-entered in 213th place, making it the highest ranked newly returning bank. Bank Keshavarzi (Agri Bank) came in 770th and Karafarin Bank 887th spot.

There were four returnees from Europe: Bulgarian Development Bank in 966th, Germany’s Mainzer Volksbank in 904th, Russia’s Promsvyazbank ranked 327th, and Luxembourg’s Banque Raiffeisen in 954th position.

Africa had three returnees: Banco Angolano de Investimentos from Angola in 913th, Ethiopia’s CBE in 817th and Credit Immobilier et Hotelier from Morocco in 976th spot.

Five banks from Asia re-entered the ranking, too. China’s Haikou Rural Commercial Bank ranked 638th, Agricultural Bank of Taiwan ranked 755th, Japan’s Towa Bank ranked at 791st, while Central Bank of India and Indian Overseas Bank ranked 500th and 616th, respectively.

Finally, three more banks from the Middle East, round out the returnees list, with Jordan’s Bank Al Etihad returning in 983rd position, Lebanon’s Blom Bank in 954th and the UAE’s Al Masraf in 795th. 

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