JOHANNESBURG, (The Southern African Times) – The Banker has published its annual ranking of the 1,000 biggest banks in the world, as measured by their level of tier 1 capital – with six South African banks making the list in 2021.
This is one more from the five banks ranked a year ago, with Capitec rejoining the list after dropping out with African Bank in 2020.
While South Africa’s banks continue to dominate the ranking in Africa as a whole, The Banker said that pressure on financial institutions as a result of the Covid-19 pandemic was clear.
This exacerbated the economic pressures already prevalent in the country, it said.
“After posting gains across the board in 2019, just three of the country’s seven lenders in this year’s rankings saw an increase in their Tier 1 capital position in 2020, as higher impairments took their toll on balance sheets,” it said.
Standard Bank has entrenched its position as the biggest bank in the country by Tier 1 capital, widening the gap between it and its closest competitor, First Rand.
Despite seeing a 5.8% climb in Tier 1 capital to $11.16 billion, however, Standard Bank slipped down the overall global rankings to 157th position. The only two South African banks to climb the rankings were Investec and Capitec.
Investec saw a 40.7% gain in Tier 1 capital to $3.05 billion (from $2.17 billion before) and now ranks 400th overall. Capitec, meanwhile, re-entered the top 1,000 banks, ranking 558th overall with $1.9 billion in Tier 1 Capital.
The biggest banks in South Africa
| # | Bank | 2020 Tier 1 Capital $m | 2021 Tier 1 Capital $m | Change |
|---|---|---|---|---|
| 157 | Standard Bank | 10 547 | 11 160 | +5.8% |
| 200 | FirstRand | 9 163 | 7 746 | -15.5% |
| 205 | Absa | 7 773 | 7 611 | -2.1% |
| 265 | Nedbank | 5 713 | 5 567 | -2.6% |
| 400 | Investec | 2 167 | 3 050 | +40.7% |
| 558 | Capitec | – | 1 899 | – |
Global performance
The world’s largest banks have withstood the pressures from the Covid-19 pandemic, adding 12.7% to their collective Tier 1 capital, reaching the highest ever level of $9.9 trillion, according to The Banker.
Total assets among the top 1,000 banks globally increased by 16%, to $148.6 trillion, while the deposit base expanded by 17.1%, to $93.9 trillion.
China continues to be the engine of growth for the global banking industry, increasing aggregate Tier 1 capital and total assets by 18.6% and 18.4%, respectively. China, with 144 banks in the ranking, now holds almost double the amount of Tier 1 capital ($2.96 trillion) than the US ($1.58 trillion), with 178 banks in the ranking.
The four largest Chinese banks – Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China – have consolidated their positions at the top of the ranking, and have extended their lead over US counterparts (JPMorgan Chase, Bank of America, Citigroup and Wells Fargo) with double-digit growth in Tier 1 capital.
Overall Chinese banks increased their aggregate Tier 1 capital by 18.6%, against 8.5% for US banks. In addition, profits continued to grow in China by 5.2% year-on-year, while falling by 31.5% in the US and 41.8% in western Europe.
