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Japanese banks show signs of recovery

The past few Top 1000 rankings have been characterised by a decline in the Japanese banking sector. However, figures for this year – taken before devastating earthquake hit the north-east of the country – show a reversal in fortune for Japan's banks.
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The scars – economic and otherwise – left by the disaster that devastated Japan's north-east are still painfully apparent, and have left it facing its third recession in a decade. Though the downturn appears to be less severe than had been initially feared, recovery will take some time. Even though Japan’s unsteady financial position may not directly affect its largest banking institutions, its impact will likely colour Japan’s position in the 2012 rankings all the same. Nevertheless, for now, its banking sector enjoys a far better showing in the Top 1000 than it did 12 months ago.

This is partly because the 2010 rankings were calculated on the basis of results released on March 31, 2009, at the end of the Japanese financial year. This year, however, many of the Japanese banks' placings were calculated on the basis of data released in March 2011. Year-on-year profit and capital change are calculated from 2010 data, but in many cases, 2011 ranking positions are the result of two years of growth.

That said, results are certainly far more positive than last year’s, halting, perhaps temporarily, the steady slide down the Top 1000 of Japanese institutions.

In contrast to last year’s results, when 17 of the top 25 Japanese banks slipped by an average of 10 places, only six lost ground in 2011. Moreover, all of Japan’s top five banks moved up from last year’s position.

Perhaps most symbolically, Mitsubishi UFJ Financial Group has reclaimed its long-held position as the highest-ranked Asia-Pacific bank in the Top 1000. The Tokyo-based firm climbed from 11th in 2010 to fifth this year, beating China’s Industrial and Commercial Bank of China – which stole its crown last year – in the process.

With a grand total of 102, Japan still boasts more banks than China in the Top 1000 too, although given that it only achieves this by a single institution, it looks unlikely to retain that accolade next year barring a catastrophe befalling the Chinese banking sector.

Top 25 Japanese banks
Top Japanese highest movers

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