Japanese banks suffered the most declines in S&P Global Market Intelligence's annual ranking of Asia's 50 biggest banks by assets, as lower central-bank deposits and a slowdown in lending to pandemic-hit borrowers sapped balance sheets.
Five lenders fell within the Top 50 and another dropped out of the list, which is based on total assets as of Dec. 31, 2022. Combined total assets tumbled 8.8% among the seven Japanese banks that appeared in this year's list and the previous edition. The Norinchukin Bank had the biggest slump at 18.8%, according to data compiled by Market Intelligence.
Assets at Japanese lenders are likely to fall again this year, according to Takahide Kiuchi, executive economist at Nomura Research Institute, following the end of a three-year government-backed COVID-19 loan program and new Bank of Japan Governor Kazuo Ueda's signals that interest rates will likely remain below zero for some time. The Japanese asset decline contrasts with mainland China, where banks are growing balance sheets and increasing their dominance of the Asia-Pacific rankings.
A total of eight Japanese banks appeared on the list, with Nomura Holdings Inc. entering the rankings and Fukuoka Financial Group Inc. dropping out. Mizuho Financial Group Inc. moved up one spot to No. 8, making it the only Japanese bank to improve its position after also appearing in the previous Top 50.
Chinese banks retain top slots
Mainland China retained its grip on the head of the rankings. Industrial and Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China Ltd. and Bank of China Ltd. remained as the top four. Their combined total assets grew 4.1% in 2022 to $19.871 trillion.
In total, 23 mainland China banks appeared in the Top 50, including one addition – Huishang Bank Corp. Ltd. Among the 22 banks that appeared on both years' lists, total assets increased 2.4% to $35.381 trillion. The People's Bank of China is pursuing a loose monetary policy, while other central banks put up rates.
The six South Korean banks on the list, unchanged from a year earlier, grew total assets 1.2% year to $2.690 trillion. KB Financial Group Inc. and Hana Financial Group Inc. both climbed one place. NongHyup Financial Group Inc. and Industrial Bank of Korea declined, while Shinhan Financial Group Co. Ltd. and Woori Financial Group Inc. were unchanged.
Five Australian banks appeared on the list, with combined assets edging up 0.2% to $3.153 trillion. Commonwealth Bank of Australia rose one place to No. 18 and National Australia Bank Ltd. climbed two spots to No. 22. ANZ Group Holdings Ltd. fell to 23rd from 21st, and Westpac Banking Corp. slipped a place to 24th. Macquarie Group Ltd. rose two notches to 45th.
Among Singaporean banks, DBS Group Holdings Ltd. rose three spots to 27th and Oversea-Chinese Banking Corp. Ltd. climbed two to No. 34. United Overseas Bank Ltd. remained at No. 40.