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Mixed fortunes for European banks’ capital positions

It was a mixed picture for European banks’ capital positions in 2021, with almost every lender in the top 10 table for central and eastern Europe seeing a rise in their Tier 1 capital, yet the opposite was true for western Europe. Burhan Khadbai reports.
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In 2021, the total Tier 1 capital of the top 10 lenders in western Europe reached $910.89bn — down just over 4% from $952.99bn the previous year. Only Barclays and Crédit Mutuel saw their Tier 1 capital rise year on year, up from $77.38bn to $81.50bn and from $69.38bn to $69.59bn, respectively. BNP Paribas saw the biggest fall in dollar terms, down from $121.98bn to $113.93bn.

HSBC sits comfortably at the top of the Tier 1 capital ranking for western Europe, with a capital position of $156.29bn, down 2.4% from the year previous. Crédit Agricole, BNP Paribas and Banco Santander maintain second, third and fourth spots, respectively. Barclays, helped by a 5.3% increase in its Tier 1 capital, overtakes Group BPCE to take fifth spot, with the latter moving to sixth. Barclays has also moved up three places in the Top 1000 World Banks ranking to 24th. Crédit Mutuel takes seventh spot in the regional table, up from ninth, with Société Générale up from 10th to eighth. UniCredit moves down from seventh to ninth, with Deutsche Bank rounding off the top 10 ranking, moving up one place since last year. Intesa Sanpaolo drops out of the top 10, after recording a 15.9% decrease in Tier 1.

Meanwhile, the total Tier 1 capital of the 10 largest lenders in central and eastern Europe (CEE) has reached $156.194bn in 2021, up 5.6% year-on-year. Every bank in the top 10 ranking saw their capital rise, apart from the three Polish banks — PKO Bank Polski, Bank Gospodarstwa Krajowego and Bank Pekao.

Sberbank, the region’s largest lender by Tier 1 capital, saw the biggest rise in dollar terms, increasing from $65.92bn to $72.85bn. Compatriots Promsvyazbank and Tinkoff Bank enter the top 10 CEE ranking, with 32.3% and 56.0% increase in Tier 1 capital.

Sweden’s Nordax Bank, Italy’s Mediocredito Centrale and the Netherlands’s Aegon Bank are the new European entrants to the Top 1000 World Banks ranking, with the banks sitting in 716th, 822nd and 860th, respectively.

Scandinavian banks feature prominently in the highest movers table for Europe, with Swedish pair Nordax Bank and Klarna Bank, along with Norway’s SpareBank1 Sorost-Norge, taking the top three spots. Nordax Bank has posted a 204.3% increase in its Tier 1 capital.

Meanwhile, Belgium’s Crelan leads the top five banks in Europe for return on capital, with Italy’s Banca Generali and Mediolanum taking second and third spot, and Spain’s Bankinter and Russia’s Tinkoff Bank rounding off the top five ranking in fourth and fifth, respectively.

Western Europe top 10 banks ($m)

Country rank World rank Bank Country Tier 1
1 9 HSBC Holdings UK 156,292
2 14 Crédit Agricole France 122,215
3 15 BNP Paribas France 113,926
4 20 Banco Santander Spain 93,695
5 24 Barclays UK 81,504
6 26 Groupe BPCE France 79,277
7 29 Crédit Mutuel France 69,594
8 32 Société Générale France 65,803
9 33 UniCredit Italy 65,659
10 34 Deutsche Bank Germany 62,926

CEE top 10 banks ($m)

Country rank World rank Bank Country Tier 1
1 28 Sberbank Russia 72,851
2 82 VTB Bank Russia 24,745
3 163 Gazprombank Russia 10,970
4 173 Alfa Bank Russia 10,370
5 179 PKO Bank Polski Poland 9,489
6 185 OTP Bank Hungary 8,986
7 255 Bank Gospodarstwa Krajowego Poland 5,834
8 266 Bank Pekao Poland 5,589
9 327 Promsvyazbank Russia 4,390
10 434 Tinkoff Bank Russia 2,971

Europe highest movers

Country rank World rank Bank Country Tier 1 % ch. Tier 1 $M
1 716 Nordax Bank Sweden 204.32 1,259
2 517 Klarna Bank Sweden 163.11 2,148
3 777 SpareBank 1 Sørøst-Norge Norway 71.78 1,054
4 434 Tinkoff Bank Russia 55.99 2,971
5 767 TBC Bank Georgia 49.91 1,090
6 843 Bank of Georgia Georgia 43.14 868
7 646 Arbejdernes Landsbank Denmark 40.59 1,513
8 60 CaixaBank Spain 35.49 37,866
9 327 Promsvyazbank Russia 32.26 4,390
10 106 Nationwide Building Society UK 30.11 18,423

Europe top five ROC

Country rank World rank Bank Country Return on capital (%)
1 595 Crelan Belgium 43.19
2 847 Banca Generali Italy 42.57
3 466 Mediolanum Italy 30.2
4 284 Bankinter Spain 28.95
5 434 Tinkoff Bank Russia 28.72

Europe new entrants

World rank Bank Country Tier 1 capital
716 Nordax Bank Sweden 1,259
822 Mediocredito Centrale Italy 926
860 Aegon Bank Netherlands 833

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