World bank competition
In its July 2003 ranking of world banks, The Banker magazine sees US banks as eating up the competition. In an era of low interest rates, US banks keep increasing their profits and their overall size, while banks from most other countries remain stagnant or even lose money. Note that their conclusions were reached well before the Bank of America and J.P. Morgan acquisitions, which emphasize even more the trends they see.
The magazine runs an annual listing of the top 1000 banks in the world. They rank them in two ways, by total assets and by Tier One capital. Tier One capital, also called core equity, is the common stock, disclosed reserves and retained earnings of bank, in other words, the shareholders' equity available to cover actual or potential losses. Banks that have larger Tier One assets are the strongest financially.
Here are few conclusions from the summary:
- The top 10 US banks account for over 57% of total bank profits of the US banks, as well as 56.9% of Tier One capital (defined below).
- The 210 US banks in the list, which account for only 24% of the capital and just 16% of the total assets, managed to produce 49% of the profits for the world's top 1000 banks.
- Those high profit margins are due, in part, to consolidation, which is eliminating some of the smaller, poorer performers. Consolidation has been slower in other countries.
- The top 25 banks worldwide control over 33% of Tier One capital and 38% of the assets in the world, a percentage that has grown steadily in recent years.
- Japanese banks keep sliding, thanks to long-term loan problems. German banks are not doing well, either. Most other European banks remain stagnant, with the Royal Bank of Scotland being a strong counter-example.
Note that the declining dollar and the improving world financial situation have certain affected these figures.
Top 20 banks by Tier One capital
| Bank |
Country |
2002 rank |
2003 rank |
| Citigroup |
US |
1 |
1 |
| Bank of America* |
US |
2 |
2 |
| HSBC Holdings |
UK |
5 |
3 |
| J.P. Morgan Chase* |
US |
4 |
4 |
| Credit Agricole Group |
France |
7 |
5 |
| Mizuho Financial Group |
Japan |
3 |
6 |
| Royal Bank of Scotland |
UK |
13 |
7 |
| Sumitomo Mitsui |
Japan |
6 |
8 |
| BNP Parisbas |
France |
15 |
10 |
| Bank One Corp.* |
US |
14 |
11 |
| Deutsche Bank |
Germany |
12 |
12 |
| HBOS |
UK |
19 |
12 |
| Barclays Bank |
UK |
20 |
14 |
| Bank of China |
China |
11 |
15 |
| Industrial and Commercial Bank of China |
China |
10 |
16 |
| Wells Fargo |
US |
18 |
17 |
| Wachovia |
US |
17 |
18 |
| UFJ Holding |
Japan |
9 |
19 |
| Hypovereinsbank |
Germany |
16 |
20 |
*pre-merger
Top 20 banks by assets
| Bank |
Country |
2002 Rank |
2003 Rank |
| Citigroup |
US |
2 |
1 |
| Mizuho Financial Group |
Japan |
1 |
2 |
| UBS |
Switz. |
6 |
3 |
| Sumitomo Mitsui |
Japan |
3 |
4 |
| Deutsche Bank |
Germany |
4 |
5 |
| Mitsubishi Tokyo |
Japan |
5 |
6 |
| HSBC Holdings |
UK |
8 |
7 |
| JP Morgan Chase* |
US |
9 |
8 |
| BNP Parisbas |
France |
7 |
9 |
| Hypovereinsbank |
Germany |
10 |
10 |
| Credit Suisse |
Switz. |
13 |
11 |
| Bank of America* |
US |
11 |
12 |
| Royal Bank of Scotland |
UK |
16 |
13 |
| UFJ Holding |
Japan |
12 |
14 |
| Barclays Bank |
UK |
17 |
15 |
| Credit Agricole |
France |
18 |
16 |
| ABN AMRO |
Neth. |
14 |
17 |
| Industrial and Commercial Bank of China |
China |
15 |
18 |
| Societe Generale |
France |
20 |
19 |
| HBOS |
UK |
24 |
20 |
* pre-merger
6:31:08 PM 
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