In this year’s Top 1000 World Banks profit ranking, both the Asia-Pacific region and North America registered marginal declines in their share of the global total. Nevertheless, Asia-Pacific banks once again dominated the overall figures, accounting for 50.81% of global profits.
This was a marginal reduction from the 2014 profit ranking, when the figure was 51.19% of the global total, and a further fall from the high recorded in 2013 when Asia-Pacific accounted for 56.7%. In part this fall in profitability may reflect the slowdown in the Chinese economy, which in turn has had an appreciable impact on the wider region. It should also be taken into account that there is increasing competition in China’s banking sector, and Beijing is moving towards interest rate liberalisation.
Similarly, North American lenders registered a slight dip in profits in the 2015 ranking, with their global share sliding from 24.19% to 22.56%. Despite this negligible dip, North America’s share of global profits has remained more or less stable since The Banker’s 2013 Top 1000 World Banks profit ranking.
The Middle East also posted a small decline in global profit share in the 2015 ranking, at 3.85%, down from 4.16% in 2014. This is partly a result of the strong capitalisation levels in the region and highly conservative regulatory requirements impacting lenders’ return on capital.
In terms of key improvements in this year’s ranking, the big winner is western Europe. Lenders from the region accounted for 14.2% of global profits, up from 11.05% in the 2013 global ranking. This significant jump is attributable to the improving economic conditions in a number of eurozone countries, as well as the ongoing reversal in fortunes for many of the region’s previously loss-making lenders.
Meanwhile, Central and South America enjoyed a marginal gain in total profit share, climbing from 5.26% in the 2014 ranking to reach 5.69% this year. Similarly, Africa’s banking market recorded strong gains in profitability, rising from 1.63% in the 2014 profitability ranking to 1.88% this year.
The improvements made by African lenders corresponds with a difficult period for banks in central and eastern Europe. The region accounts for 1.02% of total global profits, a steep fall from the 2.52% posted in last year’s ranking. This partly reflects some lenders’ exposure to Ukraine, as well as rising political and regulatory risk in some jurisdictions, including Hungary.
