Britain’s banking sector now ranks 10th in the world behind countries including France, Brazil and Russia after seeing annual profits plunge by 41%, according to research.
The Banker’s Top 1,000 World Banks revealed that UK lenders have slipped from second place in 2008 after the financial crisis has decimated earnings, with only one British bank HSBC now ranking in the top 10.
Chinese banking giant Industrial & Commercial Bank of China (ICBC) was named as the world’s top bank, marking the first time a Chinese player has secured pole position.
ICBC profits surged 14% to $49.1 billion last year. Last year’s winner Bank of America fell back to third, while fellow US group JP Morgan Chase & Co remained in second place.
The UK was overtaken by France, which now ranks eighth, after seeing combined profits of British banks drop to $19.6bn. Five years ago, UK banking profits stood at $85.2bn, according to The Banker magazine.
Asian-facing Standard Chartered, which stands in 33rd place, is the only major British bank to improve its performance in the latest ranking after profits rose by 3%.
HSBC and Barclays saw falls in profits, while state-backed players Royal Bank of Scotland and Lloyds Banking Group continued to make losses.
RBS is the fourth-biggest loss-making bank in the world after slumping into the red by £5.2bn last year, the research showed. UK banks accounted for nearly 11% of global profits in 2007, but now only account for 2.61%.
Brian Caplen, editor of The Banker, said: “UK banks always used to outperform in the ranking but for the past several years they have been slipping back.
“The most successful British banks HSBC and Standard Chartered rely on earnings from Asia and other emerging markets to maintain their position.”
The annual ranking showed that total profits of the top 1,000 banks are now back to their pre-crisis levels.
The Co-operative Bank, which is seeking to plug a £1.5bn hole in its balance sheet, was 25th in the league of biggest banking losses.