Only one UK bank ranks in world's top 10 - report

Old city bank
By Andrew Harbison, CA Today

4 July 2016

The trend of falling profits in UK banks continues, with HSBC the only UK bank to feature in this year's list of the top 10 international banks.

'Top 1000 banks 2016', a list measuring the performance and profits of financial institutions compiled by financial magazine The Banker, found that the combined profits of UK banks are falling by 22% year-on-year. 

According to the research, this downward slope has been “exacerbated by weak performance from key players".

Increasing uncertainty surrounding the future of UK financial institutions is also highlighted, as markets are only just beginning to recover from the turmoil experienced in the wake of Brexit.

Top ten world banks 2016

Rank (prev rank)BankCountryTier 1 capital ($m)
1 (1)ICBCChina274,432
2 (2)China Construction BankChina220,007
3 (3)JPMorgan ChaseUS200,482
4 (4)Bank of ChinaChina198,068
5 (6)Agricultural Bank of ChinaChina185,607
6 (5)Bank of AmericaUS180,778
7 (7) CitigroupUS176,420
8 (8)Wells FargoUS164,584
9 (9) HSBCUK153,303
10 (10)Mitsubishi UFJJapan131,753

Source: The Banker

As a result of the UK voting to leave the EU, trading in RBS shares was temporarily suspended on Monday. Since placing 3rd on the list in 2008, RBS currently sits at 19th.

Barclays, which also saw trading of its shares halted for around five minutes on Monday, fell four places from 13th to 17th.

The combined drop in profits from a number of financial institutions of 22% is the first since 2013, following a near 50% rise last year.

Goliath is weak, enter David

Two UK challenger banks have made their debut on the list this year. Metro Bank, which was publicly listed on the London Stock Exchange in March, placed at 969th. Sainsbury’s Bank, which has been trading since 1997, also made its first appearance on the list at 803rd.

Brian Caplen, editor of The Banker, praised the gains made by the challengers, but expressed his concern over the "poor performance" of the bigger banks.

He said: “While the advent of challenger banks is a healthy sign, they are still very small. The real story of UK banks this year is restructuring, downsizing and falls in profits.  They are much less significant in global terms than before the global financial crisis.”


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