HSBC has jumped from third to first place in the latest annual Banker magazine survey of the world’s top one thousand banks.
HSBC is the first non-US company in nine years to lead the survey and tops the rankings by virtue of its Tier 1 capital and profit before tax, which last year reached a new high.
‘While analysts argue how the decline in real growth in the US economy from 2.9 per cent in 2006 to 2.2 per cent in 2007 and into possible recession this year will impact globally, The Banker’s 2008 Top 1000 World Banks rankings indicate that the banking industry is far more resilient than crisis headlines suggest,’ writes the Banker’s Stephen Timewell.
‘The Banker’s 2008 ranking based around end-2007 results shows the aggregate pre-tax profits of the Top 1000 banks were hit by the downturn, but not dramatically. While aggregate profits rose by about 20 per cent in each of the previous four rankings (21.9 per cent last year), profits in the 2008 ranking stayed flat, declining by 0.7 per cent to $780.8bn compared with $786.3bn last year. While Citigroup, UBS and some other big banks showed some heavy losses in their 2007 results, this was largely compensated for by banks unaffected by the subprime crisis, especially in Asia.’
While hit by the credit crunch, HSBC has still managed to pull ahead of its rivals.
‘HSBC heads the UK banks ranking by total write-downs and credit losses with $19.5bn. Its capital injection for the period was $3.5bn. Despite the hit from the credit crunch, HSBC managed to lead the global Top 1000 ranking by Tier 1 capital with $105bn,’ wrote Mr. Timwell.
The report states HSBC roared into first place with a 19.5 per cent expansion of Tier 1 capital to $104,967m, well ahead of Citigroup which remained second but whose capital slipped by 1.8 per cent to $89,226m.
The survey found that US banks now account for just 14 per cent of aggregate Top 1000 pre-tax profits, down from 24 per cent last year, while Asian banks rose to 19 per cent from 12 per cent. European bank profits remained flat at 41 per cent of the total.
In April, HSBC also topped the Forbes 2000 list of world’s largest companies.