Chinese banks emerge world's best capitalised, biggest profit makers

China's banks are consolidating their position as the best capitalised and biggest profit makers in the world, according to a study.

Chinese banks took the top four spots for profits across the industry in 2014 after making over $180 billion between them, The Banker magazine's annual rankings of profits and capital strength showed.

The data further showed that Chinese lenders between them earned almost double the amount of their US rivals.

Industrial and Commercial Bank of China's (ICBC) earned $59.1 billion profit last year the highest, ahead of China Construction Bank, Agricultral Bank of China (Agbank) and Bank of China.

US bank Wells Fargo came in fifth with a $33.8 billion profit, followed by JPMorgan and HSBC.

ICBC was also at the top of The Bankers' ranking of the strongest banks in the world for the third year, which was based on the amount of capital held, in amount rather than as a ratio of assets. According to the magazine that method best reflected the ability of the lender  to lend on a large scale and endure shocks.

China had four banks among the top six strongest banks and there were four US banks in the top 10, with JP Morgan third and Bank of America fifth and one UK and one Japanese bank.

The Banker said in a report, ''Chinese banks are powering ahead in the ranking but are not filling the gap left by the shrinking international banks.''

The global banking model had been on the decline, since the financial crisis due to a slower world economy and tighter regulatory control.

The report said ICBC aimed to have 10 per cent of its assets outside China in five years' time.

The survey called this ''small in comparison with the global banks in their heyday''.

The UK's largest bank HSBC had been able to retain its place in the world's top 10 banks, retreating to the ninth place from fifth last year. In 2008, HSBC was the biggest bank in the world.

Irish Examiner quoted Brian Caplen, editor, The Banker, at one time the ambition of the largest banks was to have operations in all parts of the world and across all business sectors. He added, now they were focusing on a few areas in a bid to restore profitability. We may have seen the end of the global bank, he said.

The top 10 banks ranked by Tier 1 capital are:

  • ICBC (China) $248 billion
  • China Construction Bank (China) $202 billion
  • JPMorgan (US) $187 billion
  • Bank of China (China) $184 billion
  • Bank of America (US) $169 billion
  • Agricultural Bank of China (China) $168 billion
  • Citigroup (US) $167 billion
  • Wells Fargo & Co (US) $155 billion
  • HSBC (UK) $153 billion
  • Mitsubishi (Japan) $118 billion