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Global bank profits hit $920 billion as Chinese lenders boom

Published 30/06/2014, 00:19
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LONDON (Reuters) - China's top banks accounted for almost one-third of a record $920 billion (540.08 billion pounds) of profits made by the world's top 1000 banks last year, showing their rise in power since the financial crisis, a survey showed on Monday.

China's banks made $292 billion in aggregate pre-tax profit last year, or 32 percent of the industry's global earnings, according to The Banker magazine's annual rankings of the profits and capital strength of the world's biggest 1,000 banks.

Last year's global profits were up 23 percent from the previous year to their highest ever level, led by profits of $55 billion at Industrial and Commercial Bank of China (ICBC) (SS:601398). China Construction Bank (SS:601939), Agriculture Bank of China (SS:601288) and Bank of China (SS:601988) filled the top four positions.

Banks in the United States made aggregate profits of $183 billion, or 20 percent of the global tally, led by Wells Fargo's (N:WFC) earnings of $32 billion.

Banks in the eurozone contributed just 3 percent to the global profit pool, down from 25 percent before the 2008 financial crisis, the study showed. Italian banks lost $35 billion in aggregate last year, the worst performance by any country.

Banks in Japan made $64 billion of profit last year, or 7 percent of the global total, followed by banks in Canada, France and Australia ($39 billion in each country), Brazil ($26 billion) and Britain ($22 billion), The Banker said.

The magazine said ICBC kept its position as the world's strongest bank, based on how much capital they hold - which reflects their ability to lend on a large scale and endure shocks.

China Construction Bank jumped to second from fifth in the rankings of strength and was followed by JPMorgan (N:JPM), Bank of America (N:BAC) and HSBC (L:HSBA).

ICBC, which took the top position last year for the first time, was one of four Chinese banks in the latest top 10.

Wells Fargo has this year jumped to become the world's biggest bank by market value, after a surge in its share price on the back of sustained earnings growth. Its market value is $275 billion, about $75 billion more than ICBC.

The Banker said African banks made the highest returns on capital last year of 24 percent - double the average in the rest of the world and six times the average return of 4 percent at European lenders.

(Reporting by Steve Slater. Editing by Jane Merriman)

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