By OMOH GABRIEL, with agency report

Industrial and Commercial Bank of China (ICBC) has leapfrogged two U.S. banks to top the 2013 global ranking of banks with the most capital, highlighting the growing size and importance of Chinese lenders. ICBC topped The Banker magazine’s annual list of the top 1,000 banks for the first time, relegating Bank of America to third from first, while JPMorgan Chase remained second. ICBC was third last year.

The rankings are based on Tier 1 capital as a measure of a bank’s ability to lend on a large scale and endure shocks. ICBC has for some time ranked as the top bank by market value. Britain’s HSBC, which gains much of its earnings from Asia, was fourth in The Banker’s list, with China Construction Bank (CCB) ranked fifth. China had four banks in the top 10 and 96 in the Top 1,000.

Its top four lenders – ICBC, CCB, Bank of China and Agricultural Bank of China – filled the top positions for profit in 2012. ICBC’s $49 billion profit put it top of the profit table for a third successive year. Total profit for the biggest 1,000 banks is now back close to levels achieved before the 2007/09 financial crisis, but the regional share has shifted significantly, The Banker said.

In 2006 European banks accounted for 46 percent of global profits and 58 percent of assets, but last year that had dropped to less than 2 percent of profits and 43 percent of assets. Asia’s banks have lifted their share of profits to 56 percent from 19 percent in the same time and increased their share of assets to 35 percent from 22 percent. Spain’s Bankia posted the biggest loss last year at $33 billion, with six of the 10 biggest losses coming from Spain, the magazine estimated.

Banker Magazine report said “In fact, Africa stands out as top performer this year. At 2.3 per cent, it now has a higher share of global profits than Western Europe, despite accounting for less than 0.8 per cent of global assets. Pre-tax profits are up more than 30 per cent in this year’s ranking, more than double the rise in China. Its return on assets is 2.1 per cent, far outstripping Asia-Pacific or Latin America. China and Brazil both recorded return on assets of below 1.6 per cent, with Brazil’s total profits actually falling in financial year 2012. Kenya is the top African market for return on assets, at more than 5 per cent, and enjoys a new entrant in the ranking – the Cooperative Bank of Kenya entering at 1000. Elsewhere, Bangladesh is one of the fastest-growing markets, and it has a 43 per cent return on capital. Total assets per capita are not much more than $40, making this the most underbanked country represented in the Top 1000.

“This year’s ranking may also change perceptions of central and eastern Europe (CEE), widely characterised as the victim of contagion from eurozone banking groups with high market penetration in the CEE region. There are certainly troubled markets such as Slovenia and Ukraine, but the region as a whole was second only to Africa in terms of return on assets. Out of the top 10 countries for asset growth, four were from CEE, led by the largest market in the region – Russia. Even in Russia itself, the market is a divided one. A range of retail-focused banks are earning return on capital of more than 20 per cent or even 30 per cent, whereas many of the large corporate banks are struggling to push profit on capital into double figures and some are loss-making.

“In Latin America, the Andean region is clearly outperforming Brazil, with Peru and Colombia both among the top 10 countries for asset growth. Profits in Colombia are up more than 50 per cent in the 2013 ranking, with those in Peru rising almost 20 per cent, and both countries enjoy a return on assets above 2.5 per cent. Among the largest banking markets, Mexico appears to be fast taking over from Brazil as the engine of Latin American banking performance, with 32 per cent profit growth and return on assets approaching 2 per cent”.