But it could all look very different in 2007: BofA’s acquisition of MBNA Corp was only completed in January this year, so the latter’s Tier 1 capital of $13.8bn, putting it at 10 in the regional ranking (and 42nd in the global list), was not included in The Banker’s 2006 listing, which is based on full-year 2005 figures. The addition could easily take BofA to the top of the North America and global rankings, creating a Tier 1 base of $87.8bn. Even without MBNA, BofA has grown its Tier 1 by 15.2% to $74bn and assets by 16% to $1291bn. Citi’s Tier 1 capital, meanwhile, has grown only by 6.7% and its assets by a negligible 0.7% to $1493bn. BofA has also knocked JPMorgan from second to third in the North American ranking.
JPMorgan has grown its Tier 1 capital by only 5.6% and its assets by 3.6%. More tellingly, of the top 10 North American banks, it is the least profitable. With a pre-tax profit of $12.2bn (up an impressive 96.3% from last year) it only managed a 17.3% return on average capital, compared with Citigroup’s 38.3%, BofA’s 36.4% and Wachovia’s 33.1%. Its cost/income ratio of 71.21% also compares badly with Citigroup’s 54.56% and BofA’s 49.58%, both with similar business mixes.
