China’s banks continue to dominate The Banker’s Top 1000 World Banks ranking, with ICBC, China Construction Bank, Agricultural Bank of China and Bank of China remaining the four largest banks globally by Tier 1 capital*.
The annual list from The Banker, part of the Financial Times Group, is compiled after all the world’s largest lenders release their annual financial statements. The Banker’s Top 1000 World Banks ranking has been setting the industry benchmark since 1970.
A further two Chinese banks, Bank of Communications and China Merchants Bank, are in ninth and 10th place. ICBC’s Tier 1 capital now stands at $524bn, which is almost twice that held by its nearest non-Chinese peer, JPMorgan.
China Merchants Bank, whose Tier 1 capital increased by 12.58 per cent, leapfrogged the only previously remaining European lender in the largest 10 banks group, HSBC, at the very top of the ranking, which is now solely occupied by Chinese and US names.
Measured by asset size, however, HSBC remains the world’s seventh-largest bank. Two other European names, French banks BNP Paribas and Crédit Agricole, are also among the largest 10 lenders by assets.
“While the outlook for China’s economy and its banks remain uneven and unique, the increasing dominance of the country’s top lenders in terms of size in the global banking industry deserve closer and closer attention,” said Silvia Pavoni, editor in chief of The Banker.
After years in the doldrums, soaring interest rate income boosted profits for many banking markets, with some lenders reporting their best year on record in terms of pre-tax profits in 2023, according to The Banker, which compiles its Top 1000 list after all the world’s largest lenders release their annual financial statements.
Total bank pre-tax profit was $1.53tn last year, an overall average 14 per cent increase from the previous ranking and a far higher 41 per cent increase for Europe — with markets like Switzerland and Italy recording a 155 per cent and 72 per cent increase, respectively.
In the US, JPMorgan reported its highest-ever pre-tax profit at $61.6bn, the highest-ever pre-tax profit achieved by a US bank, and a 33 per cent increase from the previous year.
If higher interest rates have pushed up banks’ net interest income, they have also made borrowing more expensive and challenging for bank clients, and there are some early signs of discomfort in loan portfolios — specifically for the so-called “stage 2” loans.
Under IFRS international accounting standards, stage 2 indicates a loan whose credit risk has increased significantly since the previous reporting date. There have been noticeable increases in a number of large banking markets, with stage 2 loans now accounting for a higher share of total gross loans in Australia and Germany, at 17 per cent and 10 per cent, respectively, as property loans have been a significant area of concern for banks in both countries in recent years.
All analysis and data is available from the The Banker’s Top 1000 World Banks hub page.
Tables
Note
*Tier 1 capital is the core measure of financial strength under the international Basel regulatory framework.
Contact:
Danielle McGuigan | danielle.mcguigan@ft.com
TEAM LEWIS | thebanker@teamlewis.com
About The Banker
The Banker is a flagship publication of the Financial Times Group, providing economic and financial intelligence for banking professionals globally. Founded in 1926, The Banker has built a reputation for objective and incisive reporting. It has published the Top 1000 World Banks ranking for over five decades.
Silvia Pavoni is the editor in chief of The Banker. She joined the FT Group in 2005 and was most recently the founding editor of Sustainable Views, a new service for sustainability professionals.
About the Financial Times
The Financial Times is one of the world’s leading business news organisations, recognised internationally for its authority, integrity and accuracy. The FT has a record paying readership of 1.2mn, more than 1mn of which are digital subscriptions. It is part of Nikkei Inc., which provides a broad range of information, news and services for the global business community.
