China's Banks Riding High in the World Ratings

By the end of 1980s, before its economy went into a decade-long stall, Japan's banking industry looked down from a high place on banks in the US and Europe. Bankers at eight of the world's top ten banks used Japanese as their home language. Now it seems top bankers are a less homogenous group, and many will be speaking Chinese or Spanish, with a fair amount of English thrown in, and just a soupcon of Japanese.

 
Bloomberg's has announced the world's top ten banks, calculated as of June 30 this year, and the list includes the Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Bank of China (BoC), HSBC, JP Morgan Chase, Wells Fargo, Bank of America (BoA), Banco Santander Central Hispano (BSCH), Banco Bilbao Vizcaya Argentaria (BBVA), Goldman Sachs, and Mitsubishi UFJ Financial Group.

The latest information from The Banker, released on June 24, has the world's top five banks in terms of pretax profit all from China or Spain. ICBC, with the pretax profit of $21.3 billion, leads the pack as the world’s most profitable bank, followed by CCB ($17.5 billion), Banco Santander Central Hispano ($15.8 billion), BoC ($12.8 billion), BBVA ($9.6 billion), HSBC ($9.3 billion), and Barclays ($8.9 billion). BoA ($4.4 billion) ranks 22nd.

Also according to The Banker, among the world's top 1000 banks in 2008 in terms of capital, JP Morgan Chase, with $136.1 billion, ranks first. Bank of America, Citigroup, The Royal Bank of Scotland, and HSBC rank numbers two through five. ICBC, with $74.7 billion, ranks eighth, unmoved since last year. In 2007, the world's top five banks in terms of capital were HSBC, Citigroup, the Royal Bank of Scotland, JP Morgan Chase, and Bank of America.

Brand value comes not only from the enterprise's equity and financial value, but also its market value, and includes consumer recognition and loyalty to the brand.

On the list of financial firms�brand value, released in May by Millward Brown Optimor, ICBC, with $38.056 billion ranks No. 1, followed by CCB ($23.764 billion) and BoC ($21.192 billion). Bank of America and Citigroup fell to eighth and the tenth, respectively, while Wachovia, Merrill Lynch, Deutsche Bank, and UBS all dropped out of the top 100. Chinese banks would seem to be increasingly influential, while banks in the US and Europe are falling back a bit.

The Banker also rates the global banking industry in terms of total assets. According to the 2008 list, the top five banks are The Royal Bank of Scotland, with the total assets of $3.50095 billion, at No. 1, followed by Deutsche Bank, Barclays, BNP Paribas, and HSBC, respectively.

The Fortune 500 measures enterprises mainly by operations income. In the recent few years, the Fortune 500 lists have included ICBC, CCB, BoC, and the Agricultural Bank of China.

Assets and income of banks sometimes contradict with their market value and profit-making ability. For example, The Royal Bank of Scotland, which ranks No. 1 in terms of total assets, ranks last on the list in terms of pretax profit. This means that "big" does not necessarily mean "good" and "strong".

By March 31, 2009, ICBC's deposit balance exceeded 8.9 trillion yuan (over $1.3 trillion), and therefore became the world's largest commercial banks in terms of client's deposits.

 

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