Top 10 Largest Banks in the World

When the global financial crisis of 2008 hit the banking industry, it marked the start of a trend in which the once-dominant European banks began their decline in favor of fast growing banks from Asia. Before the crisis, European banks dominated the global banking industry with banks from Europe occupying 9 of the top 10 largest banks in the world by assets in 2007. But just 5 years after the crisis in 2013, only 4 European banks were among the top 10 in the industry and the number has fallen to just 2 as of June 2016.

Today, banks hailing from Asia have emerged as the leading institutions of finance, occupying 6 spots in the list of top 10 largest banks in the world, controlling around $16.93 trillion of the $26.6 trillion total assets held by the top 10 banks.

As such, we have compiled a list of the top 10 largest banks in the world (by assets, 2016):

Japan Post Bank
Image: Japan Times

10. Japan Post Bank

Country of Origin: Japan

Total Assets:  $2.022 trillion

Japan Post Bank, a member of the Japan Post Holding postal and financial services group, was established in 2007 after years of pressure for privatization by free market proponents across the globe. While the liberalization polices of the Japanese government swept across the telecom and railway industries in the 1980s, the postal savings systems was left untouched, making Japan Post the largest state-owned enterprise in the world and the largest bank by deposits in Japan.

As part of the final phase in its privatization, Japan Post went public in 2015 in an IPO that set the record as the largest in the world, a record that was later surpassed by that of Alibaba. However, the negative interest rate introduced by the Bank of Japan (BOJ) earlier this year to combat Japan’s sluggish growth has severely affected the bank’s operations, with its share price and profits falling significantly. Despite an unfavorable operating environment, Japan Post Bank currently ranks as the 10th largest bank in the world by assets.

Bank of America
Image: Let’s Talk Payments

9. Bank of America

Country of Origin: United States

Total Assets:  $2.187 trillion

Bank of America is the second largest bank in the United States by assets and is one of the largest in the world. Headquartered in North Carolina, the bank has a well-established international footprint, with operations in over 40 nations. It also boasts about 50 million customers and over 5,100 banking centers across the globe. The bank’s acquisition of Merrill Lynch after the 2008 crisis gave it unprecedented access into the wealth management segment and made Bank of America Merrill Lynch the world’s largest player in the wealth management industry.

However, recent years have seen the bank’s revenue fall as it reels from an unfavorable business environment characterized by low interest rates and stringent regulatory requirements. Thankfully, a Goldman Sachs analysis earlier this year has expressed confidence in its management’s ability to turn the situation around has forecasted revenue growth.

BNP Paribas
Image: BNP Paribas

8. BNP Paribas

Country of Origin: France

Total Assets: $2.417 trillion

BNP Paribas is a French based global bank founded in 2000 as a result of a merger between two banks, Banque Nationale de Paris (BNP) and Paribas. Since then, the bank has grown to become the second largest bank in Europe by assets and is now the 8th largest in the world. BNP Paribas offers banking solutions to clients across the globe through its two major business divisions: Retail Banking & Services and Corporate Institutional Banking.

In recent times, the bank’s profitability in its Retail Banking & Services division has been negatively affected by the low interest rate environment prevalent in its domestic market. However, the performance of its Corporate Institutional Banking division has continued to grow due to the diversified nature of its operations. As such, BNP Paribas is poised to maintain its dominance in the European banking industry.

JP Morgan Chase
Image: International Business Times

7. J.P Morgan Chase & Co

Country of Origin: United States

Total Assets: $2.466 trillion

J.P Morgan Chase & Co., headquartered in New York, is the largest bank in North America by assets and is the 7th largest in the world. Founded in 2000, through a merger between Chase Manhattan Corporation and J.P Morgan & Co, the company has since evolved into a global player, with a major international footprint in the corporate & investing banking and asset management segments.

In 2014, the bank’s leadership initiated a cost-cutting strategy that saw the company cut costs by $2 billion, by shuttering branches and laying off workers en masse in its consumer and community banking unit. The bank cited its need to maintain competitiveness in the midst of a restrictive business environment as reasons for the move.

HSBC
Image: Qwikfix

6. HSBC Holdings

Country of Origin: Hong Kong

Total Assets: $2.608 trillion

London-based HSBC Holdings is the largest bank in Europe and the sixth largest in the world. Founded in Hong Kong in 1865 with a mission to finance trade between Europe and Asia, HSBC has evolved into a dominant player in global banking serving 60 million customers across 71 countries.

Despite continued growth, the bank has been recently associated with cases of fraud and money laundering the most serious of which was an allegation made by the International Consortium of Investigative Journalists (ICIJ) concerning the firm’s alliance with tax evaders, in which it was fined $1.9 billion in money laundering penalties.

Bank of China
Image: The Wall Street Journal

5. Bank of China

Country of Origin: China

Total Assets: $2.656 trillion

Bank of China is the 5th largest bank in the world but is just the 4th largest in China. The bank dates back to 1912 when the government of the new republic founded it to replace the Imperial Bank of China. As the most internationalized bank in China, Bank of China’s international subsidiaries account for 26.6% of the group’s profit before tax compared to just 6.8% recorded by the next Chinese rival, the Industrial & Commercial Bank of China Ltd.

Today, Bank of China’s well-established presence in the global market allows it to serve customers scattered across 41 countries and regions. In recent times, the bank has operated under a constrained business environment characterized by low interest rates precipitated by China’s slowing economic growth.

Agricultural Bank of China
Image: The Business Times

4. Agricultural Bank of China

Country of Origin: China

Total Assets: $2.818 trillion

Founded in 1951, Agricultural Bank of China is third largest bank in China, overseeing a vast network of 23,670 branches across Mainland China and 9 major cities across the world, serving 320 million clients in its retail banking segment and 2.7 million in the corporate banking segment. The bank’s profitability in recent times has however been negatively affected by non-performing loans – a problem that persists for most of the major banks in China.

Mitsubishi UFJ Financial Group
Image: Novostimira

3. Mitsubishi UFJ Financial Group

Country of Origin: Japan

Total Assets: $2.901

Mitsubishi UFJ Financial Group (MUFG) was formed in 2005 through a merger between Mitsubishi Tokyo Financial Group and UFJ Holdings, although the bank’s original founding dates back to 1880 when the Mitsubishi Bank was established. Headquartered in Chiyoda-ku, Tokyo, MUFG is the largest bank in Japan and the 3rd largest in the world.

In a recent move to increase profitability as it suffers from Japan’s negative interest rates, MUFG has ventured overseas alongside a number of other Japanese banks, with Southeast Asia as one of its preferred destinations. In the coming years, the bank is expected to benefit from the gains made from its international business.

China Construction Bank
Image: City Plaza

2. China Construction Bank Corp

Country of Origin: China

Total Assets: $2.981 trillion

China Construction Bank (CCB) is the second largest bank in the world and boasts about 13,600 branches across Mainland China while maintaining a global presence in the major cities of the world. As part of its internationalization strategy, the Beijing-based bank recently acquired a 60% stakes in the Indonesian bank, Windu Kentjana International, a move that brings 29 tier-one branches and subsidiaries in 27 Southeast Asian countries come under CCB’s management.

Industrial and Commercial Bank of China
Image: The Wall Street Journal

1. Industrial and Commercial Bank of China

Country of Origin: China

Total Assets: $3.549 trillion

Founded in 1984, Industrial and Commercial Bank of China (ICBC) Ltd has evolved to become the largest bank in the world by far, managing $3.55 trillion in assets as of June 2016. As a highly internationalized and diversified bank, ICBC operates a network of about 17,000 offices in China and over 330 branches and subsidiaries across 76 countries and regions. ICBC also holds the title of the world’s most profitable lender.

As a result of constraints faced in the domestic market, the ICBC has followed other Chinese banks in internationalizing its operations, as evidenced by its 2015 acquisition of a 60% stake in Standard Bank for $765 million.

Comments