UK BANKS LOSING GLOBAL CLOUT TO CHINESE RIVALS
Barclays were among the top 25 in terms of profit
Monday July 2,2012
By Philip Waller
BRITAIN’S beleaguered banks are losing their global edge as China’s emerging financial titans snap up their business, new research has revealed.
Chinese banks are steaming ahead of their UK and continental European counterparts in world rankings, according to findings released by The Banker magazine.
Royal Bank of Scotland has fallen out of the top 10 of the magazine’s Top 1,000 overall rankings into 12th place, leaving only one UK bank, HSBC, in the top flight. HSBC and Barclays were among the top 25 in terms of profit but Lloyds Banking Group and RBS were ninth and 21st respectively in the top 25 ranking of losses.
The news is another blow for the banking industry as it struggles to overcome the furore caused by alleged rate-rigging at Barclays and other financial institutions.
Chinese banks are making the type of profits European banks can only dream about
The Banker’s editor Brian Caplen said: “Chinese banks are making the type of profits European banks can only dream about and this year’s results show Europe’s loss is China’s gain.”
However, the British Bankers Association said: “Banking is a dynamic and forward-looking industry and there are new players coming into the market all the time. We welcome open and active competition in the market for the good of the industry and of customers.”
UK banks’ share of global banking profits has halved to 5 per cent in the last five years while Chinese banks now make up nearly one third of the total, the research by The Banker showed. Profits made by British banks have fallen 8.2 per cent while lending has dipped 3.12 per cent and capital has decreased 1.7 per cent.
The overall rankings include four Chinese banks for the first time and Chinese giant ICBC was third – an all-time high for a Chinese group. Bank of America was top followed by JP Morgan Chase. All but one of the 25 global banks with the greatest losses were European, and only 6 per cent of total banking profits were made in the eurozone against 46 per cent five years ago.
European banks still make up a large part of global assets – 45 per cent compared to 58 per cent five years ago.
Meanwhile, research showed private investors sold £1billion of shares between March and May as global economic risks rose, the most in five years. The amount sold was almost five times the number bought in the previous three months, according to a study by Capita Registrars.
Despite that, total dividends paid to retail shareholders in the first quarter reached £2.14billion, up by more than a fifth compared to a year ago due to payments from big UK companies such as Vodafone.
Business sentiment stabilised last month following a sharp fall in May, according to a survey from Lloyds Bank. However, the net balance of economic prospects remained below zero for the second month in a row.