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Highest Movers table shows story after China

The Highest Movers table of the Top 1000 has had a distinctly Chinese feel to it in recent years, but 2013's ranking shows rapid growth among financial institutions the world over, including in Europe's crisis economies.
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Top 25 highest movers by Tier 1 capital

In contrast to 2012, the top 25 Highest Movers table for 2013's Top 1000 World Bank is no longer mainly a story of Chinese growth. Whereas Chinese banks occupied 16 positions in the table last year, there are only four such banks in this year's ranking.

While the aggregate capital growth among the Chinese highest movers has slowed to 17.71% this year, from 27.6% in the 2012 ranking, it is China Industrial Bank – ranked 24th in the table – that has recorded the largest Tier 1 capital among the high flyers, at $26.02bn. 

It is also worth noting that five of the top 25 highest movers are from south-east Asia countries – namely South Korea, Malaysia, Vietnam, Taiwan and the Philippines. Indeed, at 30.52%, the Philippines recorded the largest aggregate increase in Tier 1 capital among countries from the Asia-Pacific region.

The composition of the 25 banks in the table can broadly be explained by two key trends – pure organic growth and recapitalisation stories. Indeed, while some banks have boosted their Tier 1 capital through sheer growth, many have been forced to grow theirs in order to comply with the new Basel III regulatory requirements that come into force in 2019.

Occupying the top spot as the highest mover in 2013's ranking is J Safra Sarasin Holding, which posted a 226.21% growth in Tier 1 capital to $3.37bn. Its number one ranking can largely be explained by the fact that during 2011, the Brazilian-Swiss private bank J Safra Holding acquired a majority stake in private Swiss Bank Sarasin & Co for $1.13bn.

Meanwhile, Russia’s Orient Express takes second position after recording a 104.99% increase in Tier 1 capital to $739m. In June 2012, the bank grew its charter capital by 24% by placing 18 billion common shares via open subscription. In fifth position, Gazprombank, also of Russia, increased its Tier 1 capital by 78.15% to $9.44bn after raising $1bn in a perpetual Eurobond issue. With their balance sheets stretched by rapid lending growth during 2012, many Russian banks have been using bond or equity issues to boost capital in time for the upcoming Basel III requirements.

Another entry of note is Belgium’s Dexia in sixth position, which has boosted its Tier 1 capital by 77.71% to $14.5bn. In the 2012 ranking, Dexia had the lowest capital-to-assets ratio (1.53%) of all the banks in the Top 1000, so there was a strong need for it to recapitalise. Consequently, Dexia ranks 87th in this year’s ranking – up from 126th last year.

Two Portuguese banks feature in the top 25 Highest Movers table as a result of recapitalisations. The eighth highest mover, Portugal’s BPI recorded a 63.72% increase in Tier 1 capital to $4.81bn as a result of the country's finance ministry subscribing for €1.5bn of core Tier 1 capital issued by BPI in the form of Government Subscribed Core Tier 1 Instruments in June 2012. BPI also raised equity from its existing shareholders in August 2012 in the form of a €200m rights issue.

Meanwhile, Portugal’s Banco Internacional do Funchal (Banif), which is ranked 22nd in the table, boosted its Tier 1 capital by 47.18% to $1.53bn after receiving €1.1bn from the country’s Bank Solvency Support Facility. During 2012, Banif also merged its holding company with its main operating subsidiary. Similarly, Greece’s Piraeus Bank, in 12th position, is another bank that needed to recapitalise – prompting a 57.34% capital increase to $5.3bn. 

Pan-African lender Ecobank, in 13th position in the table, is another entry of note. It grew its Tier 1 capital by 54.93% to just under $2bn and offers an impressive growth story – while domiciled in Togo, it is present in 31 countries across Africa, where it has been experiencing rapid asset growth, upon which its Tier 1 capital has increased in line. It ranks 383rd in this year's Top 1000 ranking – up from 861st in the 2006 ranking. 

Italy’s Banca Mediolanum is ranked 14th in the table. It grew its Tier 1 capital by 53.98% to $830m in 2012, which can largely be explained by its $150m share issuance. Increasing Tier 1 capital tends to make it harder for a bank to simultaneously increase its return on capital, but Mediolanum was successful in doing both – recording the highest return on capital, at 68.81%, of all banks within the Top 1000 ranking. 

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