European banking has the longest history and can be taken to be the grandfather of modern banking, with the recognition that it was the establishment of banking in Siena in the fifteenth century that started modern banking.
At that time Sienna was part of the Republic of Florence which was one of the most powerful financial centers in Italy. The bank is called Banca Monte dei Paschi di Siena and in its original form was created in 1472. Today, however, European banking has fallen far behind the USA and China in most respects.
Banking in Europe ten years ago contributed nearly one third of global banking profits. By 2019 it was just under one fifth and in 2020 the figure is just 18%, compared to 43% for Asian banks and 26% for North America. Western European banks’ return on capital at 6.7% is the lowest for any region.
Of the Top 10 banks in the world ranked in terms of tier 1 capital at the beginning of 2020, HSBC is the only bank left – and it earns the bulk of its profits in Asia. Deutsche Bank fell 5 places to 32nd and it went from profit to loss. Société Générale dropped to 31st position. This year contrasts with 1980, when of the world Top 10, France’s Credit Agricole was #1, Deutsche Bank was fifth and the UK’s Barclays was ninth.
In terms of assets, three European banks make it into the top 10 in the world – HSBC, BNP Aribas and Crédit Agricole. In the next 10, Société Générale, Barclays and Groupe BPCE bring the total of 6 in the top 20. For comparison, in 1980 when Crédit Agricole was the leader it had $105 billion in assets. The highest ranked bank today, China’s ICBC, has assets of $4.3 trillion, about 40 times larger.
A list of the 50 biggest banks in Europe is:
|Rank||Bank||Country||Total Assets US$B|
|3||Crédit Agricole Group||France||2470.43|
|9||ING Groep N.V.||Netherlands||1105.80|
|10||Lloyds Banking Group||UK||1075.73|
|16||Credit Suisse Group||Switzerland||873.33|
|18||La Banque Postale||France||807.36|
|21||DZ Bank AG||Germany||678.40|
|23||European Investment Bank||Luxembourg||635.40|
|27||Cassa Depositi e Prestiti||Italy||532.22|
|29||ABN AMRO Group||Netherlands||476.90|
|30||Sberbank of Russia||Russia||462.30|
|33||Skandinaviska Enskilda Banken||Sweden||344.60|
|36||Nationwide Building Society||UK||305.74|
|37||Erste Group Bank||Austria||297.20|
|42||Landesbank Hessen-Thueringen (Helaba)||Germany||255.66|
|50||Raiffeisen Bank International||Austria||183.87|
European banking has been overtaken by Asian banking in the last two decades, and has been slow to recover from the financial crisis in the early 21st century. With that proviso, some of the most secure and stable banks are still found in Europe, with solid capital structures and extensive networks operating inside the European Union.
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