Chinese megabanks cement nation’s economic prowess

Banks in China dominated S&P Global Market Intelligence’s top 50 lenders in the region.

Chinese megabanks continued to be the Asia-Pacific region’s biggest lenders by assets last year, and are expected to further boost their capital buffers thanks to the state’s $69.6b (CNY500b) capital-injection plan.

Twenty-three banks from Mainland China made it to S&P Global Market Intelligence’s top 50 lenders, allowing China to project financial strength and credibility globally and reinforcing its position as a major economic power.

Eight on the list were Japanese banks, six were from South Korea, and five from Australia. India and Singapore had three banks each, whilst Hong Kong had two. Sixteen banks improved their ranking last year, 14 slipped, and the rest were steady.

Industrial and Commercial Bank of China Ltd., Agricultural Bank of China Ltd., China Construction Bank (CCB) Corp., and Bank of China (BOC) Ltd. continued to be the biggest lenders by assets in the region and in the world.

Postal Savings Bank of China Co., Ltd. (PSBC), Bank of Communications Co., Ltd. (BoCom), and China Merchants Bank Co., Ltd. also made it to the top 10.

“Capital infusion into Chinese banks will increase their net assets,” Yusuke Miura, a senior economist at NLI Research Institute who covers the Chinese economy, said in the S&P report. “Thus, their assets will remain substantial.”

In April, China's Ministry of Finance issued the first batch of special Treasury bonds worth US$69.6b (CNY500b), the proceeds of which would be used to buy shares in four megabanks—BOC, CCB, BoCom, and PSBC.

Higher US tariffs on China—down to 30% on all exports as of May—is expected to have a minimal impact on Chinese banks.

“Even if profits at Chinese banks face tariff pressure, their assets would be minimally impacted unless losses occur,” Miura said. 
Mainland Chinese banks typically hold larger assets than other Asian lenders because they extend loans in a market that relies less on direct finance, unlike Japan or the US, where businesses raise funds by selling new shares or bonds, he added.

Mitsubishi UFJ Financial Group, Inc., Japan’s top bank, closed out the top five. Sumitomo Mitsui Financial Group, Inc. and Mizuho Financial Group, Inc. ranked eighth and ninth.

The Japanese lenders boosted their earnings beginning April 2024 after Bank of Japan abandoned its decade-long negative rate policy a month earlier. 

London-based HSBC Holdings Plc, founded in Hong Kong in 1865, landed on the 13th spot. 

ANZ Group Holdings Ltd. was the highest-ranked bank in the region that is not from Greater China or Japan. The Australian bank jumped three spots to 18th place. Its rival, Commonwealth Bank of Australia, was No. 20.

India’s biggest lender by assets was the State Bank of India at No. 19. In Singapore, DBS Bank Ltd. was the undisputed king at 24th place, whilst rivals Oversea-Chinese Banking Corp. Ltd. and United Overseas Bank Ltd. were 35th and 41st, respectively.