Japanese banks remain on top

THE FOUR biggest banks in the world continue to be Japanese, led by Sumitomo Bank, despite the damage to their capital caused by this year's sharp fall in the Tokyo stock market.

Ranked by the size of their core capital, six of the top 10 banks are Japanese, according to a list of the top 1,000 banks compiled by The Banker magazine.

But the list shows that the world recession is eating into banks' capital strength and profits around the world. Seven of the top 10 showed a fall in profits.

The biggest US bank, Citicorp, is only ranked 29th in the world, with Bank of America at number 30. Their relatively low positions reflect the damage done to their capital base by bad debts and a fall in the value of the dollar.

Britain's biggest bank, Barclays, is ranked number nine ahead of Deutsche Bank. Barclays is also one of the strongest capitalised of the top 10, along with Credit Agricole and Union Bank of Switzerland. It has an approximate core capital-to-assets ratio of 4.5 per cent, comfortably over the 4.0 per cent required under the new Basle capital requirements.

Of the other big English banks, National Westminster is at number 13 in the world and Lloyds is 42, both with strong capital ratios. Midland, ranked 60, has a weaker core capital ratio of 3.84, while its new parent, Hongkong Bank, is 33rd with capital of 4.01 per cent of assets.

The top 10 banks ranked by the size of their core capital are: Sumitomo Bank dollars 16.8bn; Dai- Ichi Kangyo Bank dollars 15.9bn; Fuji Bank dollars 15.1bn; Sanwa dollars 14.8bn; Credit Agricole dollars 14.6bn; Sakura Bank dollars 13.5bn; Union Bank of Switzerland dollars 13.1bn; Mitsubishi Bank dollars 13.0bn; Barclays bank pounds 11.6bn; Deutsche Bank dollars 11.2bn.