For the second year running, the list of the Top 25 highest movers in the Top 1000 World Banks ranking is dominated by Chinese banks. This year, like last year, there are 15 Chinese banks in the ranking, with no other country coming anywhere near that total – the nearest contender in 2011, the US, has a mere three banks in the ranking, although it does boast the highest moving bank overall in the shape of First Southern Bancorp.
The table is based on percentage increases in Tier 1 capital rather than on the number of places moved, as was the case in the 2009 ranking. On this basis the 2011 table stands out compared to last year’s as showing larger percentage increases.
First Southern, for example, stands out with its impressive 755% uplift in Tier 1 largely related to its $400m private offering of common and preferred stock to institutional investors – this can be compared with the 286% increase of the UK’s Lloyds Banking Group which topped the 2010 table. This latter increase was related to the HBOS purchase and was, of course, a smaller percentage of a much higher capital base – $77bn compared to First Southern’s $368m.
The other US banks in this year’s highest movers table are Sterling Financial Corporation in fifth place with a 153% increase to $1bn, and West Coast Bancorp in eighth place with a 119% increase to $323m.
Then there is China. Clearly the factors underlying the huge rises in Tier 1 capital in Chinese banks relate to their role in channelling the country’s fiscal stimulus, which kept the country growing throughout the global financial crisis, and with its success then came further lending – although stricter requirements introduced over the past six months by the regulator are now starting to slow things down.
In some cases assets were increased by 30% to 50% and with that kind of growth, capital increases surely followed. The highest Chinese mover in percentage terms was Bank of Suzhou in second place in the overall table, with a 565% increase to $1.9bn. Then comes Bank of Jining in third place, with a 246% rise to $318m.
Altogether the top 10 of highest movers contains five Chinese banks, three US banks, a South African and a Spanish bank.
Capitec Bank of South Africa has increased its capital by 128% to $447m, placing it sixth. Spanish savings banks, or cajas, can be expected to see some increases in the future as they recapitalise and consolidate. For now, Caja de Ahorros y Monte de Piedad records a 116% increase, taking the bank to $3.4bn of Tier 1 capital and placing it 10th in the list.
Further down the ranking, and apart from the Chinese players, there are a mixture of emerging market and developed country banks. Of the banks from developed economies, Germany’s Dusseldorfer Hypothekenbank is placed 16th while Japan’s Towa Bank comes in at 21st. From emerging markets, Bank Negara Indonesia comes in at 18th with Kenya Commercial Bank at 24th. Bermuda, as a large financial centre, does not fit neatly into either classification – its Bank of NT Butterfield & Son holds up the table in 25th place.
