Bank of America retained its lead in the Top 1000's global ranking, and therefore also in the North American ranking. In last year’s ranking, the North Carolina-based lender knocked JPMorgan off the top position thanks to its conspicuous efforts to boost capital, resulting in a Tier 1 capital a third larger than the one featured in the 2009 ranking. This year, capital kept on growing – although by only 1.91%. JPMorgan’s Tier 1 capital grew by the larger ratio of 7.13% – in contrast to the drop of 2.3% showed in last year’s listing – but it was not enough to reclaim the top spot. Its $142.45bn Tier 1 capital is about $20bn shorter than Bank of America’s.
Capital-assets ratios (CARs) remained strong for all US lenders after the financial crisis focused attention on banks’ strength as opposed to profitability, with values of 7.22 for Bank of America, 6.73 for JPMorgan and 6.59 for Citi, the regional ranking’s third largest lender.
While Citi went back into black last year and closed its books with a $12.27bn pre-tax profit, Bank of America moved in the opposite direction. From a $4.36bn pre-tax profit in 2009, the bank closed last financial year with a $1.32bn loss, which included a $10.4bn write-down in the value of its credit card unit, attributed to federal regulations that limit debit fees and other charges.
Since the financial crisis erupted, Canadian lenders have kept on grabbing headlines for their soundness and prudent management. The top Canadian lenders have on average improved their Tier 1 capital by 8.78%, against 5.15% for the top US banks. Analysing profitability gives a slightly different picture, however, with US banks scoring a higher average pre-tax profits figure of $5.33bn, against Canadian lenders’ $ 4.66bn. Profits in all top Canadian banks have, however, improved, with Canadian Imperial Bank of Commerce showing the highest pre-tax profits growth of 165.35%.
Royal Bank of Canada continues to lead the Canadian group and has posted more than $6.8bn in pre-tax profits in 2010, a 35% year-on-year increase. The bank’s Tier 1 capital was $33.39bn and its CAR was 4.68. RBC remains in seventh position in the North America ranking, while immediately below it is US’s PNC Financial Services Group – which in June this year acquired RBC’s ailing US retail operations for $3.45bn. PNC has moved one place up from our 2010 ranking, replacing Scotiabank, which has dropped to 10th position.
Florida-based First Southern Bancorp is the highest mover in North America, and a new entrant in our listing, with a Tier 1 capital which grew by 754.78% to $368m. Its assets are $834m – almost the smallest figure in our Top 1000 ranking (the smallest being the US’s Armed Forces Benefit Association, also a new entrant).
