British banks losing ground in world league

Tim Wallace
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BRITISH and European banks are rapidly losing ground to rising Chinese giants, according to a major new report out today, with relatively low capital levels and profits, and the highest losses in the world.

In the last year UK banks’ profits fell 8.2 per cent, lending dropped 3.12 per cent and capital fell 1.71 per cent, and HSBC is now the only UK or European bank in the top 10 in the world, ranked by Tier 1 capital.

By contrast China has four banks in the top 10, up from three in 2011, the US has another four and Japan has one, according to The Banker magazine’s list of the top 1000 banks.

Bank of America is the largest with $159.232bn (£101.36bn) of Tier 1 capital, followed by JP Morgan Chase with £150.384bn and the Industrial Commercial Bank of China (ICBC) with $140.028bn.

Listed by profits, HSBC and BNP Paribas are the only European institutions in the top 10, while the top three are all Chinese, led by ICBC which made $43.218bn in the last year.

Indeed, China has seen a dramatic rise in recent years – its banks accounted for just four per cent of global profits in 2007, but 29.3 per cent now.

Eurozone banks made just six per cent of global profits, down from 46 per cent five years ago, despite their share of global assets falling from 58 per cent to a still substantial 45 per cent over the same period.

Similarly, 24 of the top 25 banks by biggest losses are European, including RBS and Lloyds, which lost $1.095bn and $5.476bn respectively.