Published On: Sun, Jun 28th, 2015

UK banks lose ground to global rivals

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HSBC, which led the world rankings in 2008, fell from fifth to ninth place in The Banker’s global league table

People withdraw money at a HSBC bank cash point in Paris. The bank has fallen down the global rankings. Photograph: Christian Hartmann/Reuters

People withdraw money at a HSBC bank cash point in Paris. The bank has fallen down the global rankings. Photograph: Christian Hartmann/Reuters

Britain’s scandal-hit banks are losing their position in world markets, with all but two tumbling down global rankings as Chinese rivals surge ahead.

HSBC, the UK’s only player inside the world’s top 10, slumped from fifth to ninth position, according to an annual ranking of the world’s top 1,000 banks by The Banker. The bank has faced a torrid year marked by a tax evasion scandal at its Swiss banking arm exposed by the Guardian and other publications.

In 2008, HSBC led the rankings, which are based on capital strength.

Royal Bank of Scotland (RBS) has fallen even further down world rankings. The world’s third largest bank in 2008, the Edinburgh-based bank slipped from 15th to 18th position this year. Barclays slid from 12th to 13th place as, like RBS, it restructured and slimmed down in the wake of the financial crisis.

Brian Caplen, editor of The Banker, said: “At one time several UK banks were among a handful of truly global players. But since the financial crisis they have reduced their scope and are focusing on a fewer areas in a bid to restore profitability. We may have seen the end of the UK-based global bank.”

The Banker global rankings. Source: /The Banker Photograph: The Banker

The Banker global rankings. Source: /The Banker Photograph: The Banker

Nationwide was the only UK financial firm to move up the rankings – climbing to 105th position from 119th, while Lloyds Banking Group held steady in 22nd position. Both banks are focused on their home market.

Despite UK banks’ poor performance in global terms, profits and returns are slowly recovering, according to The Banker, although they remain well below their pre-crisis levels. Total pre-tax profits increased by 49% to $32.5bn (£20bn), but are still only a third of their peak performance in 2007.

Chinese and US banks now dominate world rankings, with four banks each. ICBC is the world’s biggest bank, according to The Banker, and employs more people than the entire UK banking sector. In contrast, HSBC, recently announced a further 50,000 job losses, has reduced its global workforce by nearly 8% since 2011.

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