The top 25 global banks'* year-on-year (y-o-y) average growth rate of total assets stood at 7.5% in 2021, finds GlobalData. The leading data and analytics company notes that most of the top players bounced back from the effects of COVID-19, in terms of revenue and profit growth.
Out of the 25 banks, 20 reported y-o-y growth in their revenues. The most notable players were Lloyds Banking Group and Credit Agricole, as these two banks recorded growth of more than 20% annually.
Parth Vala, Company Profiles Analyst at GlobalData, comments: "Although there was a 7.3% decline in Lloyds Banking Group's interest income, a 47.5% growth in non-interest income, owing mainly to a 138.2% growth in net trading income, enabled the bank to post an impressive revenue growth of 24.6%."
Similarly, Credit Agricole posted subdued growth of 1.1% in its interest income. However, it accrued a 31% growth in its non-interest income, which was driven by a substantial rise in net gains on other financial assets at fair value through profit. This bolstered the French giant's revenue by 21.7%.
On the other hand, Mitsubishi UFJ's significant decline in interest income in 2021, on account of lower average interest rates on interest-earning assets, led to its revenue decline of 16.8%.
Between 2017 and 2021, Goldman Sachs and Postal Savings Bank of China were the only two banks that reported a compound annual growth rate (CAGR) of over 10% in their revenue. Societe Generale had the most notable decline at a 7.4% CAGR.
All 25 banks returned to growth in terms of profitability, with 11 players reporting an exceptional growth rate of over 50%.
Vala comments: "Most of these exceptional performers benefitted from a substantial decline in loan loss provisions that were made to mitigate the effects of COVID-19. As the economic activities gradually returned to normality in 2021, the banks reduced the amount that was set aside for mitigating potential unforeseen losses."
Over the past five years, State Bank of India and Goldman Sachs reported a CAGR of 210.4% and 49.9%, respectively, in terms of profitability. However, China Minsheng Bank and Mitsubishi UFJ were on the opposite end of the growth spectrum, with a negative CAGR of 8.9% and 4.3%, respectively.
Goldman Sachs reported an exceptional y-o-y growth of 26% in its total assets, which was driven by a rise in cash and equivalents, collateralized agreements, net loans and customer and other receivables. However, HSBC's total assets shrunk 1% annually due to lower derivative assets and a drop in financial investments.
Vala adds: "The banks that reported a CAGR of over 10% in total assets over the past five years were JPMorgan Chase, China Merchants Bank, Goldman Sachs and Sberbank Rossii."
* Top banks by revenue in 2021