OREANDA-NEWS. August 01, 2013. The Banker, a UK-based magazine, published its latest Top 1,000 World Banks ranking on July 1, 2013. ICBC is the world's largest bank in terms of Tier 1 capital. This is also the first time an Asian bank has come atop since the ranking was launched nearly a century ago.

ICBC moves from No. 3 a year ago to No.1 on the back of a 15 percent increase in capital in 2012, according to The Banker's data. Last year's winner Bank of America falls back to third. JP Morgan Chase remains second. ICBC's stellar performance marks a new high in the growing strength of the Chinese banks. China Construction Bank, the country's second largest, also grew its capital by 15% and dislodged Citigroup from the fifth place. The UK's only bank in the Top 10 is fourth-placed HSBC, which generated significant earnings from its Asian operations.

China has 96 banks in this year's ranking, with four banks listed in the Top 10: ICBC, China Construction Bank, Bank of China and Agricultural Bank of China. The four Chinese banks also lead the peers for their profitability.

Brian Caplen, editor-in-chief of The Banker (UK), said: "For the past several years European and American banks have been stagnant and shrinking while Chinese banks have been expanding in line with the growth in Chinese economy. On most measures they now score as well or better than Western banks but their big test will be how they cope as China's growth slow over the next few years."

The ranking showed that total profits of the Top 1,000 World Banks are generally approaching the pre-crisis level albeit with uneven distribution due to difference in business environment. In 2006, European banks accounted for 46% of profits and 58% of total assets among Top 1,000 . Today, their assets still amount to 43%, but the large provision required for their deteriorating asset quality significantly eat into their capital. The profit share of European banks is only 1.58% among the Top 1,000. In contrast, Asian banks remain in an economically good shape.

Combined with their improving risk control, stable asset quality and sound operation, Asian banks saw their assets’ share surge from 22% to 35%, and their profits from 19% to 56%. Nevertheless, many challenges loom ahead, requiring Asian banks to adjust structure, reinforce risk control and push forward business transformation if they want to achieve sustainable growth.

Despite continued poor performance across European banks, one highlight is Turkish banks whose profits grew by 37%. However, Spanish banks altogether lost US\\$73 billion, representing nearly 5% of the country's GDP. Among the ten largest losing banks six are Spanish.

Globally, Africa's banks have doubled their share of profits from 1.15% in 2006 to 2.31% today, while Central and South America's share has nearly tripled from 2.37% to 6.37% over the same period.