The trade magazine ‘The Banker’ a part of the Financial Times group that has been carrying the rankings since 1970, has compiled a list of the world’s top 1,000 banks for the year 2009; the five Indian banks have been able to make their position in the list.
Banks capital is the core measure to know about bank’s financial strength that includes largely of shareholders’ capital. The two of Indian banks – State Bank of India is positioned at 64th position and ICICI Bank Ltd is figured at 81st position among the top 100 by tier I capital.
While Punjab National Bank, HDFC Bank Ltd and Bank of India are positioned at 239, 242 and 263, respectively in the list to be published in the July issue of ‘The Banker’.
The latest list is being published after the financial maelstrom faced by the global banking industry last year where the US and Europe governments had to rescue banks by funding them with hundreds of billions of dollars.
As per the magazine records last year banking profits had declined by 85.3% from $780.8 billion in 2007 to $115 billion and return on equity had dropped from 20% to 2.69%.
According to capital strength JP Morgan Chase and Co., Bank of America Corp., Citigroup Inc., Royal Bank of Scotland Plc. and HSBC Holdings Plc. are the top five banks in the list. Among the five top banks, HSBC is the only banks that did not receive any government support.
The Banks which wedged to the basics, taking deposits and lending in their home markets, were the best. Industrial and Commercial Bank of China, followed by China Construction Bank and Spain’s Banco Santander SA attained maximum profits.
In a press statement magazine’s editor Brian Caplen told, “In future banks will be run much more conservatively”. “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.”