S&P Global Market Intelligence Global Bank Ranking: Chinese Banks Maintain Dominance in 2023 Despite Economic Headwinds

Rhea-AI Summary

Chinese banks maintained their dominance in the global largest lender rankings of 2023 despite a downturn in the property sector. Industrial and Commercial Bank of China remained the world's largest bank, with assets of $6.3 trillion. Agricultural Bank of China surpassed China Construction Bank Corp. to claim second place, with 14.5% loan growth in 2023, showcasing the continued strength of China's banking sector. In the Asia-Pacific region, seven of the eight Japanese banks on the list fell in the ranking. India-based HDFC Bank newly entered the list at 74th position. Among U.S. banks, JPMorgan Chase & Co. remained the fifth-largest bank in the world. European banks also experienced weaker loan growth in 2023, with some of the biggest banks shedding assets.

Positive

• Chinese banks maintaining dominance in the global largest lender rankings despite economic headwinds

• Industrial and Commercial Bank of China remaining the world's largest bank with assets of $6.3 trillion

• Agricultural Bank of China surpassing China Construction Bank Corp. to claim second place with 14.5% loan growth in 2023

• India-based HDFC Bank entering the list at 74th position after a merger with its parent company

• JPMorgan Chase & Co. remaining the fifth-largest bank in the world among U.S. banks

Negative

• Loan growth slowing as borrower demand waned in the face of higher interest rates

• Banks tightening reins on new originations due to liquidity pressures and concerns over future credit losses

• European banks experiencing weaker loan growth in 2023 and shedding assets

Insights

Financial Analyst

The latest S&P Global Market Intelligence Global Bank Ranking suggests a landscape where market positions have shown significant resilience, particularly among Chinese banks. The maintenance of 20 Chinese banks in the top 100 global lenders with the top four spots is indicative of the robust nature of China's financial institutions, even amid a general downturn in the property sector. This growth is particularly significant for the Agricultural Bank of China, which has seen substantial loan growth as a result of the government's support for the agricultural sector. In contrast, the report notes slower loan growth elsewhere, impacted by higher interest rates and liquidity pressures. These conditions are reflected in the rankings, with a majority of banks falling in position. This may suggest a cautious approach to lending and a tightening of credit criteria, which could impact global liquidity and potentially slow international economic growth. For investors, this could imply a shift in market dynamics, with Chinese financial institutions potentially offering stability, while other banks might face headwinds. It is also worth noting the strategic divestitures by Citigroup and HSBC, which could indicate a focus on core activities and regions viewed as more profitable or better aligned with their business strategies.

Market Research Analyst

The entrance of HDFC Bank Ltd. at the 74th spot following a merger that significantly increased its assets, alongside other movements in the rankings, highlights the ongoing consolidation and strategic positioning within the banking sector. The dynamic nature of the industry is also illustrated by the shifts in rankings among Japanese banks and the strategic asset sales of European banks. For instance, the rise of Société Générale SA in the rankings, despite selling operations in Africa, may reflect an effective realignment of its business focus that could provide a more streamlined, profitable organization. Investors would do well to monitor these strategic changes as they can have implications for future earnings and competitive positioning. The entry and rise of new players, like HDFC Bank, signal potential investment opportunities where growth and expansion could result in increased market share and influence within the sector.

Twenty Chinese banks continue to claim spots in top 100 global lenders, including top four

NEW YORK, May 8, 2024 /PRNewswire/ -- Chinese banks maintained their dominance in the global largest lender rankings of 2023 despite a downturn in the property sector, according to the Global Bank Ranking published by S&P Global Market Intelligence, an annual ranking of the 100 largest banks in the world by total assets.

Chinese banks kept 20 positions in the ranking, including the top four, showcasing the continued strength of China's banking sector. Industrial and Commercial Bank of China Ltd. remained the world's largest bank, with assets of $6.3 trillion. Agricultural Bank of China Ltd. surpassed China Construction Bank Corp. to claim second place, with 14.5% loan growth in 2023, driven by a national strategy to bolster the agricultural sector. It was the only change to the top six spots from a year ago.

"Elevated inflation and higher interest rates served as headwinds to global economic growth and the commercial real estate sector. Despite a downturn in the property sector, Chinese banks retained their place as the largest in the world," said Nathan Stovall, director of financial institutions research at S&P Global Market Intelligence.

Overall, 47 banks fell in the ranking while 29 rose and 24 maintained their positions.

"Loan growth slowed as borrower demand waned in the face of higher interest rates, while banks tightened the reins on new originations in the face of liquidity pressures and concerns over future credit losses," Stovall said.

In the Asia-Pacific region, seven of the eight Japanese banks on the list fell in the ranking—the exception was Sumitomo Mitsui Financial Group Inc., which maintained its place at 13. India-based HDFC Bank Ltd. newly entered the list at 74^th position, following a merger with its parent company, driving its assets to $464.3 billion.

Among U.S. banks, JPMorgan Chase & Co., with assets of $3.9 trillion, remained the fifth-largest bank in the world, followed by Bank of America Corp. Meanwhile, Citigroup Inc. slid one place to 12^th as it continued to sell noncore assets as part of a restructuring.

European banks also experienced weaker loan growth in 2023. Some of the biggest banks in Europe shed assets in 2023 and continue to do so in 2024. UK-headquartered HSBC Holdings PLC—the seventh largest bank in the world—sold its Canadian operations and its retail business in France, and agreed to sell its Argentine business. France-based Société Générale SA rose to 19^th place from 22^nd last year despite selling some businesses in Africa and mulling sales of other assets.

To access the Top 100 list, or any of the regional bank rankings, please visit here or contact press.mi@spglobal.com.

S&P Global Market Intelligence's opinions, quotes, and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.

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FAQ

How many Chinese banks maintained spots in the top 100 global lenders ranking of 2023?

Twenty Chinese banks maintained spots in the top 100 global lenders ranking of 2023.

Which Chinese bank remained the world's largest bank in 2023?

Industrial and Commercial Bank of China remained the world's largest bank in 2023 with assets of $6.3 trillion.

Which China-based bank surpassed China Construction Bank Corp. in the rankings?

Agricultural Bank of China surpassed China Construction Bank Corp. in the rankings, claiming second place.

Which U.S. bank remained the fifth-largest bank in the world in 2023?

JPMorgan Chase & Co. remained the fifth-largest bank in the world among U.S. banks in 2023.

Which India-based bank entered the global top 100 list in 2023?

India-based HDFC Bank entered the global top 100 list at the 74th position in 2023.