The Banker collects cost/income ratio data from banks as a measure of efficiency among banks across the globe. While methodology among banks across regions varies and what is included can differ, we are attempting to provide a global picture of the measure.
Philippine National Bank maintains the highest disclosed non-performing loans (NPL) ratio in the Top 1000, at 51.63%, and Egypt’s Bank of Alexandria, the country’s sixth largest bank, has come in second with 26.07%. With three banks in the top 10 disclosed NPLs from Lebanon, led by Fransabank (24.71%), the Lebanese authorities are keen to maintain high levels of disclosure.
The geographical structure of the 2007 Top 1000 World Banks reflects the increasing size and role of Asian (excluding Japan) and Middle Eastern banks. Their numbers in the ranking have increased by 11 and 10 respectively to reach 174 from Asia and 93 from the Middle East.
The annual tussle in recent years between the US and Germany to produce the highest number of New Arrivals came to an abrupt end this year as China easily ousted them both. The overall number of newcomers dropped significantly to 46, compared with 54 in last year’s and 60 in the two previous listings.
Africa is changing and it is not just $11.7bn of Chinese investment in recent years that is making a difference. Nigeria’s banks are bulking up as a result of central bank governor Charles Soludo’s new capital requirements, and are becoming bigger and stronger through multiple mergers and acquisitions.
Lower oil prices have not dried out the huge liquidity available to most Middle East banks, which have continued to produce booming profits and strong growth in the region, especially in the Gulf. As a result, the number of banks from the Middle East region in the 2007 Top 1000 has increased from 83 last year to 94.
The latest Top 25 Asian listing emphasises the growing dominance of the big state-controlled Chinese banks. Following their recent record initial public offerings (IPOs), the big three state banks, led by ICBC with a Tier 1 capital of $59.2bn, and followed by Bank of China ($52.5bn) and last year’s leader, China Construction Bank ($42.3bn), have moved far away from their nearest Asian competitor, National Australia Bank with $17.5bn.
The Banker utilises the cost/income ratio as a gauge of efficiency in banks globally. There are variations in the method of calculation across different geographies, however, we try to create a worldwide picture through the data collated here.
The highest and second highest disclosed number of non-performing loans (NPLs) this year were from Philippine National Bank (PNB) at 51.63% and Myanmar Oriental Bank (MOB) at 39.15%, respectively, retaining the positions they held last year. PNB’s level has risen and MOB’s level remained the same.