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US banks continue to dominate North American ranking

While the charge of the Chinese banks grabs the headlines, the big names from the US still lead The Banker's Top 1000 ranking as well as dominating the North American list.
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North America

The status quo is very much maintained in this year’s North America ranking. The top seven banks are in the same positions as in 2011’s chart with Bank of America heading the table – and the Top 1000 ranking – followed by JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley. Royal Bank of Canada is the largest Canadian bank and remains in seventh place. US Bancorp is in eighth position having swapped places with PNC Financial Services Group, which is now down at ninth place. Two more Canadian banks follow, with Toronto Dominion in 10th place and Scotiabank in 11th.

US banks retain their strong position in the Top 1000, taking three of the top five positions and four of the top 10, now matched only by the Chinese banks in this latter effort. And whereas European banks have in many cases suffered declines in capital as they have written off losses, North American banks have often seen increases (although Bank of America is one exception, with its Tier 1 down from $163bn to $159bn). JPMorgan, Citigroup and Wells Fargo have all seen increases.

There is, however, a big size division among North American banks between the big four – Bank of America, JPMorgan, Citigroup and Wells Fargo – with upwards of $110bn of Tier 1, and the next division of banks headed by Goldman Sachs with $63bn.

Canada’s largest bank, Royal Bank of Canada, increased its Tier 1 from $33bn to nearly $36bn but this still makes it less than a quarter of the size of Bank of America. Canadian banks came through the crisis relatively unscathed and are now in a position to grow, with both Toronto Dominion and Scotiabank increasing their Tier 1 capital base by about $4bn apiece.

Further evidence of the more stable position of North American banks compared to European ones comes by comparing percentages of profits and assets (of the Top 1000 universe) now and five years ago by region.

Whereas European banks have seen their share of profits fall from 46% five years ago to 6.3% in 2012, US banks have seen their share of the profits steady at about 20%. Over that period, US banks’ share of the total asset base has stayed relatively stable at 13%.

The US is famous for having a large number of small banks as well as its giants. This year the total number of US banks in the Top 1000 has fallen from 192 to 180 but this may not reflect US consolidation as much as increasing numbers of higher capitalised banks from other countries entering the ranking.

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