China's ICBC emerges world's largest bank, overtakes American rivals

Industrial and Commercial Bank of China (ICBC) has been ranked as the world's largest lender ahead of two American finance giants.

ICBC overtook the US banks, as it topped the global ranking of banks with the largest capital with the shock ranking highlighting the growing size and importance of Chinese lenders.

The lender took the numer uno position in The Banker magazine's annual list of the top 1,000 banks for the first time, toppling Bank of America to third rank, while JPMorgan Chase retained its second slot.

China's ICBC was ranked third last year by the magazine, which is owned the Financial Times.

The rankings were  based on the Tier 1 capital as the measure of a bank's ability to lend on a large scale and endure shocks.

For some time ICBC had ranked as the top bank by market value.

HSBC of the UK, which gets much its earnings from Asia, was placed 4th in the magazine's list while China Construction Bank (CCB) ranked fifth.

China now has four banks in the world's top 10 list and 96 in the top 1,000.

Its top four lenders - ICBC, China Construction Bank, Bank of China and Agricultural Bank of China took the top positions for profit in 2012.

The ICBC' s advance from the third to the first place was fuelled by a 15-per cent increase in capital, according to the magazine.

The development is seen as a new high in the growing strength of the Chinese banks, The Banker said on its press release.

China's second largest bank, the China Construction Bank (CCB), saw a capital growth of 15 per cent, dislodging Citigroup from the fifth place.

The Bank of America, which was at the top last year was down to the third. HSBC was the only UK bank to figure in the top 10, thanks to significant earnings from its Asian operations, according to the ranking.

According to Brian Caplen, editor of The Banker, for several years now European and American banks had been stagnant and shrinking while Chinese banks had been expanding in line with the growth in the Chinese economy.

He added, on most measures they now scored as well or better than western banks but their big test would be how they coped as China's growth slowed over the next few years.