The western European banking sector faced significant headwinds in 2021, as illustrated in the headline numbers in The Banker’s 2022 Top 250 Western European Banks ranking. The aggregate Tier 1 capital of the lenders listed contracted by 4.3%, to $2.6tn, while their total assets dropped by 3.1%, to $50tn, based on year-end 2021 results.
In contrast, their pre-tax profits more than doubled, reaching $277.7bn compared to just $133.4bn in the 2021 ranking. In the previous ranking, only 77 of the 215 institutions that recorded a profit in 2020 managed to increase their pre-tax profits. In this year’s ranking, 234 banks recorded a profit, with 182 making bigger gains in 2021 than they did in 2020, and 27 moving from loss to profit. However, much of this boost can be attributed to a reduction or reversal in last year’s credit impairment charges for expected loan losses that didn’t materialise.
