New Delhi: Five Indian lenders figure in the 2009 list of the world’s top 1,000 banks compiled by trade magazine ‘The Banker’ after a year of carnage in the global banking industry.
The publication of the latest list follows the financial maelstrom that ripped through the global banking industry last year, requiring governments in the US and Europe to rescue banks with hundreds of billions of dollars in state-funded bailouts. Sandeep Bhatnagar / Mint
Only two, State Bank of India at the 64th position and ICICI Bank Ltd at 81st, figure among the top 100 by tier I capital—a core measure of a bank’s financial strength that consists largely of shareholders’ capital.
Punjab National Bank, HDFC Bank Ltd and Bank of India come in at 239, 242 and 263, respectively, on the list to be published in the July issue of ‘The Banker’, a part of the Financial Times group that has been carrying the rankings since 1970.
The publication of the latest list follows the financial maelstrom that ripped through the global banking industry last year, requiring governments in the US and Europe to rescue banks with hundreds of billions of dollars in state-funded bailouts.
Banking industry profits last year fell 85.3% from $780.8 billion in 2007 to $115 billion and return on equity dropped from 20% to 2.69%, according to the magazine.
JP Morgan Chase and Co., followed by Bank of America Corp., Citigroup Inc., Royal Bank of Scotland Plc. and HSBC Holdings Plc. were the top five banks by by capital strength. HSBC was the only one among the five that didn’t receive any government support.
Banks that stuck to the basics, taking deposits and lending in their home markets, fared the best. Industrial and Commercial Bank of China, followed by China Construction Bank and Spain’s Banco Santander SA achieved the largest profits.
“In future banks will be run much more conservatively,” said the magazine’s editor Brian Caplen in a press statement. “Regulators will require them to hold more capital and be less leveraged. This will reduce the profits of the industry as a whole but will bring about a safer banking system.”