The banks in China have surpassed European banks in terms of profitability during the crisis in the euro area, according to a survey of 1,000 banks published by the British magazine “The Banker”. The most profitable bank in the world is Industrial Commercial Bank of China, which last year made a profit before tax of $43.2 billion, followed by China Construction Bank Corporation, which recorded a profit of 34.8 billion dollars , and Bank of China, with a profit of 26.8 billion dollars.
On the fourth place is the U.S. bank JP Morgan Chase and Co., and the fifth is the Agricultural Bank of China. Banks in China have collected in 2007 only 4% of the global profit but after the crisis started the percentage rose to 29.3%. On the other hand European banks have recorded in 2007 approximately 46% of the global profit but the percentage dropped to only 6% in the following years. “We see real differences between different banking groups worldwide. European banks are on their knees because of the debt crisis,” said Brian Caplen, editor of the British magazine for CNN.
To further underscore the decline of European banks during the crisis in the euro area, 24 of the 25 worst performing banks come from Europe. Greek Bank National Bank of Greece is considered in the ranking conducted by The Banker as the worst performing bank in the world. “If you look at the situation five years ago, banks in China were nowhere to be found. Now they have collected a third of the profit made globally,” said Caplen.
Although there is great suspicion on data announced by the big state-owned Chinese banks, Caplan said that the lending institutions in China can be trusted as any other bank. The fact that the three most profitable banks in the world come from China just show how the financial power has moved to far-East from Europe and the U.S.
Reply