Monday 3 July 2017 4:10 pm

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

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 rankingWorld rankingBankTier one capital ($m)Y/Y % change
19HSBC Holdings138,022-9.97
435Lloyds Banking Group45,162-17.20
538Standard Chartered42,292-1.12
6N/ACredit Suisse International21,023-1.00
7N/ASantander UK15,110-16.19
8104Nationwide Building Society13,6366.86
9N/ABank of America Merrill Lynch International8,25821.12
10N/AClydesdale Bank3,697-14.97
11N/ASumitomo Mitsui Bank Europe3,6852.14
12N/AUBS UK3,402-18.67
14N/AGoldman Sachs International Bank2,6811.03
15361Ford Credit Europe Bank2,648-5.07
16364Yorkshire Building Society2,621-12.72
17N/ABank of Ireland UK2,286-19.88
18N/ATSB Banking Group2,204-11.70
19420Coventry Building Society2,170-13.26
20460Investec Bank UK1,940-4.39
21462Virgin Money Group1,9224.99
22N/AScotiabank Europe1,741-1.03
23498Tesco Bank1,708-6.01
24554Skipton Building Society1,470-11.86
25N/ARBC Europe1,238-9.48
26624Close Brothers Group1,218-4.13
27666Leeds Building Society1,094-8.42
28N/AItau BBA International9924.97
29N/AICBC Standard Bank UK929-11.65
30728The Co-operative Bank910-47.05
31782Metro Bank80479.66
32805Aldermore Bank740-2.64
33838Sainsbury's Bank700-3.30
34N/ADeutsche Bank UK699-18.48
35N/ATD Europe691-13.24
36865West Bromwich Building Society640-1.63
37875Principality Building Society623-12.57
38N/ANomura Bank International6141.19
39N/AMizuho International592-10.96
40N/AABC International Bank555-15.39
41N/AICICI Bank UK538-0.22
42N/AChina Construction Bank UK4870.91
43N/ACIBC World Markets UK478-0.69
44988Shawbrook Bank458-2.03
45993OneSavings Bank45111.19

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 10BankCountryTier one capital
2China Construction BankChina$226bn
3JP MorganUS$208bn
4Bank of ChinaChina$199bn
5Bank of AmericaUS$190bn
6Agricultural Bank of ChinaChina$189bn
8Wells FargoUS$171bn
10Mitsubishi UFJ Financial GroupJapan$136bn

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