The top 25 global banks* registered revenue and total assets growth of 15.5% and 5.8%, respectively, in 2022, with most of the top players performing exceedingly well despite challenges from high inflation and the Russia-Ukraine war, says GlobalData, a leading data and analytics company.
All the top 25 banks reported year-on-year growth in their revenues. The most notable players among them were Banco do Brasil, Itau Unibanco, and Banco Santander, which recorded year-on-year growth of over 40%.
Murthy Grandhi, Company Profiles Analyst at GlobalData, said: “Banco do Brasil benefitted from an 87.8% increase in interest income and 27.6% growth in non-interest income, at the back of strong performance of credit, a well-balanced mix of liquidity assets, interbank investments, and securities operations.”
Similarly, Itau Unibanco achieved a significant 47.2% growth in interest income, thanks to the expansion of the loan portfolio and the gradual shift in product mix towards loans. It also recorded a 34.1% rise in non-interest income owing to increased commissions and banking fees attributed to higher transaction volumes from credit and debit card activities in both the issuance and acquiring segments.
Banco Santander also delivered outstanding results, reporting a notable 53.7% growth in interest income and a 13.1% increase in non-interest income. These impressive figures were primarily attributable to higher volumes and interest rates, as well as proactive spread management. Moreover, the bank experienced a rise in net fee income due to increased commercial activity, further contributing to its strong performance.
In contrast, Wells Fargo suffered from weakened net gains from equity securities, mortgage banking, and investment advisory, as well as lower asset-based fees. Furthermore, the bank experienced a decline in revenue due to disposal of select businesses in 2021.
Grandhi said: “Despite the challenges posed by the Russia-Ukraine war and rising inflation, the banks successfully rebounded from pandemic –induced setback. The banks demonstrated resilience and achieved robust revenue growth, primarily attributed to a notable increase in net margins. This growth was largely fueled by the upward trend in interest rates.”
Banco do Brasil and China Merchants Bank exhibited impressive profitability growth over the past five years, with a compound annual growth rate (CAGR) of 24.6% and 14.4%, respectively. On the contrary, Sberbank Rossii and Societe Generale experienced a decline in profitability, with a negative CAGR of 24.2% and 16.3% respectively, appearing at the opposite end of the growth spectrum.
Agricultural Bank of China achieved remarkable year-on-year growth of 16.7% in its total assets. This notable increase was primarily propelled by a rise in net loans and advances to customers, financial investments, and cash and balances with central banks. Conversely, Bank of America’s total assets experienced a 3.7% decline, with lower debt securities and reduced cash and cash equivalents being the contributing factors.
Grandhi concluded: “Among the top 25 banks by revenue, only Goldman Sachs, China Merchants Bank, Agricultural Bank of China, Itau Unibanco, China Construction Bank, Postal Savings Bank of China, and State Bank of India reported a 10% compounded annual growth in total assets over the past five years.”