Big UK banks slip down in global ranking, but Metro and the challengers make ground

 
William Turvill
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HSBC Reports Record Bank Profits
HSBC was ranked as nine in the world, the UK's best performer (Source: Getty)

Big UK banks are suffering compared with international rivals, according to a ranking of the world’s 1,000 largest lenders out today.

HSBC remains Britain’s biggest bank in the global ranking, coming in ninth for the second year in a row. However, the lender – which topped the 2008 ranking – suffered its worst result in seven years thanks to a 62 per cent fall in profits.

Royal Bank of Scotland, which fell from 19th to 30th place in the rankings, and Lloyds Banking Group, down from 24th to 35th, also suffered. Uncertainty following the EU referendum, coupled with a drop in the value of sterling, were blamed.

The annual ranking, compiled by The Banker magazine, uses tier one capital as its key measure.

Looking at the UK as a whole, banks pulled in pre-tax profits of $17.3bn (£13.3bn) in 2017, down 32 per cent from $25.3bn last year. In terms of profits, the UK is the 10th highest ranking country. However, the UK’s contribution to profits has fallen considerably in recent years, from 10 per cent of the global total in 2008 to 1.8 per cent in 2017.

Read more: UK slides down world ranking of banks

Top UK banks

UK ranking World ranking Bank Tier one capital ($m) Y/Y % change
1 9 HSBC Holdings 138,022 -9.97
2 18 Barclays 70,331 -10.47
3 30 RBS 49,900 -27.86
4 35 Lloyds Banking Group 45,162 -17.20
5 38 Standard Chartered 42,292 -1.12
6 N/A Credit Suisse International 21,023 -1.00
7 N/A Santander UK 15,110 -16.19
8 104 Nationwide Building Society 13,636 6.86
9 N/A Bank of America Merrill Lynch International 8,258 21.12
10 N/A Clydesdale Bank 3,697 -14.97
11 N/A Sumitomo Mitsui Bank Europe 3,685 2.14
12 N/A UBS UK 3,402 -18.67
13 348 Schroders 2,796 -9.36
14 N/A Goldman Sachs International Bank 2,681 1.03
15 361 Ford Credit Europe Bank 2,648 -5.07
16 364 Yorkshire Building Society 2,621 -12.72
17 N/A Bank of Ireland UK 2,286 -19.88
18 N/A TSB Banking Group 2,204 -11.70
19 420 Coventry Building Society 2,170 -13.26
20 460 Investec Bank UK 1,940 -4.39
21 462 Virgin Money Group 1,922 4.99
22 N/A Scotiabank Europe 1,741 -1.03
23 498 Tesco Bank 1,708 -6.01
24 554 Skipton Building Society 1,470 -11.86
25 N/A RBC Europe 1,238 -9.48
26 624 Close Brothers Group 1,218 -4.13
27 666 Leeds Building Society 1,094 -8.42
28 N/A Itau BBA International 992 4.97
29 N/A ICBC Standard Bank UK 929 -11.65
30 728 The Co-operative Bank 910 -47.05
31 782 Metro Bank 804 79.66
32 805 Aldermore Bank 740 -2.64
33 838 Sainsbury's Bank 700 -3.30
34 N/A Deutsche Bank UK 699 -18.48
35 N/A TD Europe 691 -13.24
36 865 West Bromwich Building Society 640 -1.63
37 875 Principality Building Society 623 -12.57
38 N/A Nomura Bank International 614 1.19
39 N/A Mizuho International 592 -10.96
40 N/A ABC International Bank 555 -15.39
41 N/A ICICI Bank UK 538 -0.22
42 N/A China Construction Bank UK 487 0.91
43 N/A CIBC World Markets UK 478 -0.69
44 988 Shawbrook Bank 458 -2.03
45 993 OneSavings Bank 451 11.19

Brian Caplen, editor of The Banker, described the figures as looking “bleak” for the UK. “We’ve gone from a position where we basically punched above our weight in global terms before the financial crisis, and we’re now holding on to be considered a serious banking player,” he told City A.M.

However, there was some positive news for the UK, with challenger banks flying up the rankings. Metro Bank jumped 187 places from 969th to 782nd thanks to an 80 per cent capital increase. Three challengers also entered the ranking for the first time: Aldermore (805), Shawbrook (988) and OneSavings (993).

“This is good from a UK banking position,” Caplen added. “The government’s always wanted to have more competition, and it’s getting it, a little bit.”

Outside of the UK, Chinese banks continued to dominate the rankings. Industrial and Commercial Bank of China (ICBC) took top spot with tier one capital of $281bn, ahead of China Construction Bank in second, Wall Street’s JP Morgan in third, Bank of China in fourth, Bank of America in fifth and Agricultural Bank of China in sixth.

The Banker highlighted 2017 as a strong year for BRIC (Brazil, Russia, India and China) countries, with lenders across all three countries performing well in the ranking.

Top 10 global banks

World top 10 Bank Country Tier one capital
1 ICBC China $281bn
2 China Construction Bank China $226bn
3 JP Morgan US $208bn
4 Bank of China China $199bn
5 Bank of America US $190bn
6 Agricultural Bank of China China $189bn
7 Citigroup US $178bn
8 Wells Fargo US $171bn
9 HSBC UK $138bn
10 Mitsubishi UFJ Financial Group Japan $136bn

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