US mutual bank’s IPO positions it at the top

All eyes were on Eastern Bank Corporation as it went public in October 2020, one of the few initial public offerings of the year by a US bank. As one of the oldest and largest mutual savings banks in the country, some believe that its demutualisation signals an appetite for acquisitions.

Importantly, the move allowed the bank to increase its assets by 37.3% and its Tier 1 capital by a whopping 136.5%, to $3bn, securing it first place in the highest movers’ table. It also jumped up 254 places in the Top 1000 ranking, to 406th.

Its compatriot, South State Corporation, comes in third place in the movers’ table following its merger with CenterState. The regional tie-up created the eighth largest bank headquartered in the US south-east. Retaining the South State name, the merged entity enhanced its Tier 1 capital by 109.2% and rose 202 positions to 408th in the main ranking.

Sandwiched between the two US mega-risers is another bank from the Americas: Banco Provincia of Argentina, which managed to increase Tier 1 capital by 114.4%, moving up 226 places to 732nd, despite the country’s challenging environment — the economy contracted year-on-year by 19.1% in June 2020 before rebounding towards the end of the year.

Banco Provincia is joined in the top 25 movers by two other Argentinean banks: Banco Credicoop and Banco de la Nación Argentina, which improved their Tier 1 positions by 80.4% and 76.0%, respectively. Three other US community or regional banks also made the top 25: FirstBank, First Horizon National Corp and Pacific Premier Bancorp.

Outside the Americas, Asian banks had a good showing in the top 25 table, with five banks each from China and India, and one bank each from South Korea and Vietnam. The biggest gain in Tier 1 from an Asian bank is Union Bank of India, which added 84.2% and rejoins the Top 1000 ranking after a year’s absence. This is extra impressive given the tough operating environment the Indian banks have been operating in over the past few years.

This is the first time an Indian bank has featured in the top 25 highest movers table since 2017. That time it was Yes Bank, which also managed to secure a spot this year. Following tight on the heels of Indian Bank, which saw a rise of 74.7% in Tier 1, Yes Bank’s improvement of 71.1% put it in third place among the country’s banks and 13th place in the table overall.

Punjab & Sind Bank and Canara Bank, which are also returners to the Top 1000, round off the top five Indian lenders, with increases of 54.6% and 48.2%, respectively.

While China is well represented, its five banks are located towards the bottom of the highest movers table. Bank of Fushun, a commercial bank based in Liaoning province, takes 19th position with a 51.2% rise in Tier 1 capital, followed by Bank of Jinzhou, which had required $419m in state-engineered support in 2019. Over the course of 2020, the latter added 48.1% to its Tier 1 position.

For the second year in a row, Chinese challenger MYBank — launched in 2015 by e-commerce giant Ant Group — has made it into the top 25 for Tier 1 expansion. Last year it added 93.3% to its Tier 1, while this year was a more muted – but still impressive – 46.8% increase. This year it is joined by another digital challenger, XW Bank, which was founded in 2016 and backed by Chinese electronics company Xiaomi. For its inaugural entry into the Top 1000 World Banks ranking, XW Bank rounds out the top 25 movers with a Tier 1 rise of 45.3%.

Swedish bank Klarna is another digital challenger that made it into the highest movers’ club, and is one of only three European banks that managed to do so. While Klarna increased its Tier 1 position by 57.5%, Banque Postale of France managed a 97.2% rise and Fineco of Italy improved by 61.2%.

Top 25 highest movers