Japan’s biggest banks surge past others in balance-sheet growth.
While Chinese institutions retain the top four spots in Global Finance’s 2020 ranking of the World’s Biggest Banks, the pace of asset growth in 2020 was strongest in China’s island neighbor to the east. The Big Three Japanese banks—Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Financial group—recorded a 10% year-over-year balance sheet expansion, on average, and growth that eclipses banks in Canada (+7%), China (+6%) and Europe (+5%).
What’s behind the rapid asset growth? Japanese banks are operating domestically in an ultralow interest rate environment that stifles earnings. They emphasized lending to overseas corporate clients to expand into higher-yield markets. Notable gainers among Japanese institutions included The Norinchukin Bank, which moved up from #32 to #29. Sumitomo Mitsui moved up two spots to #13, while MUFG retained its #5 spot and now has over $3 trillion in assets for the first time, comparable to the four largest Chinese banks.
Total assets of the top 50 banks expanded 14% year-over-year, with European banks accounting for $26.6 trillion (32% of the total), followed by Chinese institutions with $25.3 trillion (31%). Most of the 13 Chinese banks that earned a place in the rankings either maintained or improved their position.
Shanghai Pudong Development Bank, in particular, jumped six positions to #28 on the strength of a 9% increase in assets. Movement among European banks was mixed. Several prominent names moved down: Deutsche Bank, UBS and Intesa Sanpaolo (down 3 three places each), UniCredit (moving down 4) and ING (moving down 6). In North America, of the four returning Canadian banks, all rose at least two positions except Royal Bank of Canada, which fell one place.
Movement was minimal among the six returning EU banks. Banque Fédérative du Crédit Mutuel and DZ Bank are new entrants this year as the threshold for inclusion rose to $628 billion from $617 billion in 2019, forcing out Nordea and Westpac. That leaves Australia with only two institutions among the world’s 50 biggest banks: Commonwealth Bank of Australia; and ANZ Group, which fell four spots following a 5% drop in assets.
