Chinese banks dominate 1000 world banks ranking while Africa banks deliver highest return 

The Banker in its top 1000 world banks 2018 has said that Africa’s banks delivered the highest returns with a 26 per cent return on capital. The report which has just been released in London said “Africa’s slow but steady recovery is shown in the 2018 statistics, with Standard Bank once more topping the rankings. It also said that Chinese banks dominate the global banking industry. The report said “in the Middle East the new regional leader is First Abu Dhabi Bank, as a result of last year’s merger, while Africa Banks delivered highest returns 

According to The Banker’s latest ranking of the Top 1000 World Banks. “Europe’s banks are starting to recover after several bad years, but they are no match for Chinese banks which strengthened their grip on the ranking. India’s banks were the worst performing. Western Europe’s banks increased their share of global banking profits from 13 per cent to 20 per cent helped by strong performances in France, Germany and the UK and a turnaround in Italy. 

“Major banks such as Italy’s UniCredit, the UK’s Royal Bank of Scotland and Credit Suisse helped this recovery by moving back into the black after heavy losses. UniCredit climbed 21 places to 24th in the overall ranking with a 79 per cent capital uplift. Last year European banks held the top ten places in a table of largest losses but this year Indian banks hold six of the ten places. Chinese and Indian banks are a story of contrasting fortunes. For the first time, Chinese banks hold the top four places in the overall ranking based on Tier 1 capital with ICBC remaining top for the sixth year running.

Chinese banks account for four of the top five banks with the highest profits and together make nearly one third of global profits. ICBC grew its capital by $43 billion which is like adding a Standard Chartered or a UBS. Chinese banks together increased their capital by $337 billion or 20 per cent. The other standout country in Asia is South Korea where the banks added $8 billion in overall profits, an increase of 81 per cent, close to the total annual profits of either Malaysia or Denmark. The profits uplift of South Korea’s banks was the fifth highest in the world. But North Korea — whose leader Kim Jong Un recently met with US president Donald Trump — does not have a single bank in the ranking. 

“The highest losses were in India where the banks turned a $7.9 billion profit into a $9.2 billion loss, the largest in the world. India’s public sector banks lent excessively and are now paying the price. Says The Banker’s editor Brian Caplen: “Finally, after some dismal years in European banking we are seeing a recovery. Losses in Greece and Portugal are much less while France, Germany, the Netherlands, Spain and the UK all saw big increases.”

“Chinese banks are increasing their lead in terms of capital and profits putting more distance between themselves and the big American banks. But Indian banks had a terrible year as the central bank pushed them to clean up their balance sheets.” In the other BRIC countries, continuing economic problems in Brazil meant the banks had a flat year while Russia provided the worst performing bank in the ranking. Otkritie recorded the highest losses and the lowest regulatory capital ratio. But Russian banks as a whole performed well with the giant Sberbank increasing profits 47% to be the world’s 10th most profitable bank and climbing five places to 31st in the main ranking.

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