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Best-performing banksSeptember 4 2005

HSBC reclaims region’s top rank

The global giant clambers back up to number one and a different picture emerges as M&As filter through.
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The status quo has been restored at the top of The Banker’s listing of the Top 300 European banks by Tier 1 capital. HSBC Holdings has regained the top spot from Crédit Agricole, which last year finally broke the stranglehold that HSBC had had on the top place in these annual listings since 1995.

In 2004, Crédit Agricole was preoccupied with working through its merger with Credit Lyonnais while HSBC continued to expand with the finalisation of the Bank of Bermuda purchase, the acquisition of significant minority stakes in Industrial Bank in China (through HSBC subsidiary, Hang Seng Bank), UTI Bank in India, and Bank of Communications in China, and the takeover of Marks & Spencer Money, a UK top-10 credit card provider.

Few changes to note

There are few significant changes in the list this year. The completion of Santander Central Hispano’s acquisition of Abbey National has helped move the group up from 12th last year to sixth in the current listing and means that Abbey no longer appears.

Kaupthing Bunardabanki moved up to 101st place as a result of its 2004 acquisitions of the Danish corporate bank FIH Ehrvervsbank from Swedbank in June, and Norwegian securities broker A. Sundvall in February.

Next year’s listing will show more changes with Unicredit’s acquisition of HypoVereinsbank, Fortis Bank’s acquisition of Turkey’s Disbank, Yapi ve Kredi’s acquisition by Koç Holding, (in which UniCredit also has a 50% interest), and its merger with Koçbank as well as signs of more mergers in the German savings bank sector.

Newcomers included BHW Group (at 91), Sparkasse Pforzheim Calw (246) and Kreissparkasse Waiblingen (292) from Germany, and Caja General de Ahorros de Granada (255) and Bank Guipuzcoana (278) from Spain. BN Bank, at 299, is making its first and final appearance in the list as it was acquired earlier this year by Iceland’s Islandsbanki.

The aggregate pre-tax profit of the Top 300 grew by nearly 38% over the previous year to $250bn following last year’s 50% growth. The continued strength of European currencies against the dollar was a contributory factor but consumer finance remained a strong growth area despite difficult conditions in several of the region’s major economies.

Germany’s 59 banks in the Top 300 returned to aggregate profitability of $13.4bn although HypoVereinsbank, WestLB and to a lesser extent, Aareal Bank, still recorded significant losses. Deutsche Bank had a 46.2% growth in pre-tax profit, surpassing the figure recorded in 2002. Elsewhere, the UK banks delivered an aggregate pre-tax profit of $62.3bn from 24 banks, up from $49.7bn the previous year (25 banks) despite Egg posting a $200m loss. In France the aggregate grew to $37.5bn from $28.8bn a year earlier.

Tier 1 capital up

Aggregate Tier 1 capital grew from $1110.2bn to $1318.8bn, an increase of 18.8%, while aggregate assets grew by 20% from $28,186.5bn to $33,837.4bn.

Germany again had the highest representation in the Top 300 with 59 banks followed by Others 48 (Andorra 2, Belarus 1, Cyprus 3, Greece 5, Ireland 5, Liechtenstein 3, Portugal 7, Russia 10 and Turkey 12), Spain 41, Switzerland 31, Italy 29 and the UK 24.

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