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|
|4||35||Lloyds Banking Group||45,162||-17.20|
|6||N/A||Credit Suisse International||21,023||-1.00|
|8||104||Nationwide Building Society||13,636||6.86|
|9||N/A||Bank of America Merrill Lynch International||8,258||21.12|
|11||N/A||Sumitomo Mitsui Bank Europe||3,685||2.14|
|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|
|24||554||Skipton Building Society||1,470||-11.86|
|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|
|34||N/A||Deutsche Bank UK||699||-18.48|
|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|
|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|
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|
|2||China Construction Bank||China||$226bn|
|4||Bank of China||China||$199bn|
|5||Bank of America||US||$190bn|
|6||Agricultural Bank of China||China||$189bn|
|10||Mitsubishi UFJ Financial Group||Japan||$136bn|