Top 10 banks in the world by market value as on March 2010

About a year back we posted an article on the largest banks in world by market capitalization as on Feb 26, 2009. At that time I was searching for the list of the biggest banks but couldn't find it on internet for free. So, I had to find the market cap of the big banks in the world (finding the names of banks wasn't that difficult). 

Recently, I came across the list of biggest companies in the world by their market value published by Financial Times (FT). The list was comprehensive and has details like country and sector so finding the top 10 banks was a very easy thing now. Here's the top ten banks as on March 2010:

Rank	Company	Country
1	Industrial and Commercial Bank of China	China
2	China Construction Bank	China
3	Bank of America	US
4	JP Morgan Chase	US
5	HSBC	UK
6	Wells Fargo & Co	US
7	Bank of China	China
8	Citigroup	US
9	Banco Santander	Spain
10	BNP Paribas	France

There have been few changes in the list to what we published in Feb 2009. As the global financial situation witnessed some improvement, the American banks have regained some of their lost market capitalization thereby helping them to improve their rankings. Compared to Feb 2009 when the top 10 list had four banks  from China, two from US and one each from Italy, Japan, Spain and UK, in Mar 2010 there were four banks from US, three from China and one each from UK, Spain and France. However, the Chinese banks still hold the top two slots. This might be because the American banks although bigger than Chinese are yet to fully recover from the financial crisis that had hit the investor's confidence, while Chinese banks being  in an emerging economy also commands high valuations. However, what came in surprising is that in the list of top 500 companies in the world there were only seven American Banks, while China has nine banks in top 500. This appears to be bit on the lower side for the country with most number of banks  (as per Federal Deposit Insurance Corporation US had 7895 FDIC insured institution as on May 2010) and a highly advanced banking system. Is it because of consolidation in the US banking sector or investor's lack of confidence in smaller banks given the recent series of bank failures.

Country	No. of Banks in Top 500 Global Companies
China	9
US	7
Canada	5
UK	5
Australia	4
Brazil	4
France	3
India	3
Japan	3
Singapore	3

Data Source: Global Top 500 

Top 10 banks of the world by market capitalization (April 2009)

Bank	Country	Mkt Cap on Apr 30, 2009
Indl & Coml Bank of China	China	197
China Construction Bank	China	133
JP Morgan Chase	US	124
HSBC	UK	123
Bank of China	China	120
Wells Fargo	US	85
Banco Santander	Spain	73
Mitsubishi UFJ Financial	Japan	63
Goldman Sachs	US	59
Bank of America	US	57

Fed Stress test for 19 biggest US Financial Institutions

US Federal Reserve is putting the 19 biggest US financial institutions under stress test to check their stability if the economic situation worsens. Those under the stress test along with their P/E and market capitalization as on 24 April 2009 are listed below:

Name of Finanical Institution	P/E	Market Cap (Billion USD)	Code
J.P. Morgan Chase & Co.	58.6	125.4	JPM
Wells Fargo & Co.	7.8	90.8	WFC
Goldman Sachs Group	27.1	61.0	GS
Bank of America Corp.	12.0	58.2	BAC
US Bancorp	16.5	33.4	USB
Bank of NY Mellon Corp.	27.4	30.9	BN
American Express Co.	13.3	29.3	AXP
MetLife	6.4	24.0	MET
Morgan Stanley	-	23.8	MS
PNC Financial Services Group	18.0	19.2	PNC
Citigroup	-	17.6	C
State Street Corp.	9.4	16.1	STT
BB&T Corp.	9.7	13.1	BBT
Capital One Financial Corp.	-	7.5	COF
SunTrust Banks Inc.	18.3	5.7	STI
Regions Financial Corp.	-	3.9	RF
Keycorp	-	3.5	KEY
Fifth Third Bancorp	-	2.1	FITB
GMAC LLC	-	-

The stress test which is aimed at assessing the capital adequacy of the major financial institutions under various scenarios comes under the SCAP (The Supervisory Capital Assessment Program). The banks that perform poorly under this stress test will be asked to increase their capital and will come under pressure from the investors. Fed has also released a 21 page document stating the methodology which it will use for the stress testing these institutions. The results of the test will start coming after May 4, 2009. One reason behind Fed stating the methodology 10 days in advance is to prevent any shock to the investors. The press release about the methodology was done about an hour after the closing of the US market for the weekend, thus giving analysts time to analyse and digest the information.

Resources:
The Fed's press release
The Fed's stress testing methodology

Top 10 banks in the world by market capitalization as on Feb 26, 2009

The top 10 banks in the world by their market value as on yesterday (Feb 26, 2009) are presented in this article. The top three slots are occupied by banks from China. The other banks in top 5 are HSBC of UK, and American bank JPMC, the two being very close in market value.

In the top 10 list four banks are from China, two from US and one each from Italy, Japan, Spain and UK.

	Bank	Country	Mkt Cap bil. USD
1	ICBC	China	169.6
2	China Construction Bank	China	118.4
3	Bank of China	China	103.2
4	HSBC	UK	91.4
5	JP Morgan Chase	US	90.0
6	Wells Fargo	US	62.6
7	Banco Santander	Spain	53.6
8	Mitsubishi UFJ Financial	Japan	52.5
9	Bank of Communications	China	34.6
10	Intesa Sanpaolo	Italy	31.8

Because of the financial crisis the market capitalization of most of the US banks has eroded heavily leaving only two banks from the country in the top 10 valued banks of the world. The top 10 banks at the end of previous year (Dec, 2008) as mentioned in an earlier article had three US banks.

	Bank	Country	Mkt Cap
1	ICBC	China	173.9
2	China Construction Bank	China	128.3
3	JP Morgan Chase	US	117.7
4	HSBC	UK	115.2
5	Bank of China	China	98.2
6	Wells Fargo	US	98.0
7	Banco Santander	Spain	75.0
8	Bank of America	US	70.6
9	Mitsubishi UFJ Financial	Japan	70.1
10	BBVA	Spain	45.1

The market value of Bank of America had fallen to 28.6 billion USD (26 Feb '08) from 70.6 (31 Dec '09) and falls short of top 10. The last two months have not been good for the equity markets and the bear market started in 2008 is continuing. The banks in the developed countries are most hit with many of them falling more than 20% in last two months.

	Bank	Mkt Cap 26 Feb '09	Mkt Cap 31 Dec '08	Change
	ICBC	169.6	173.9	-2.5%
	China Construction Bank	118.4	128.3	-7.7%
	Bank of China	103.2	98.2	5.1%
	HSBC	91.4	115.2	-20.7%
	JP Morgan Chase	90.0	117.7	-23.6%
	Wells Fargo	62.6	98.0	-36.1%
	Banco Santander	53.6	75.0	-28.6%
	Mitsubishi UFJ Financial	52.5	70.1	-25.2%
	Bank of Communications	34.6	34.6	0.1%
	Intesa Sanpaolo	31.8	44.1	-28.0%

The Chinese banks have been able to resist the fall and the China Construction Bank was the worst hit with a 7.7% decline in value.

Logos:

Top Investment banks, brokerage companies of India

We have looked at the exchange listed investment and or brokerage companies: companies which either are directly into investment banking companies or provide brokerage services to retail and corporate investors. Based on the market value of these companies, as on Jan 17 2009, we have listed the top in this field along with their market capitalization.

	Market Cap (Rs. Billion)
Religare Enterprises Limited	24.5
Edelweiss Capital	17.9
JM Financial	15.8
India Infoline	13.1
Centrum Capital	11.1
Future Capital	9.9
Motilal Oswal	9.0
Geojit Fin Services	4.9
Indiabulls Securities	4.8
IL & FS Investmart	4.6
Apollo Sindhoori	2.9

Below is some information about these companies as provided on their websites.

Religare Enterprises Limited (REL) is an integrated financial services groups. It offers a diverse services ranging from investment in equities & commodities, wealth management, portfolio management services, personal financial services, insurance broking, investment banking and institutional broking services. The Investment Banking business is offered through Religare Capital Markets Limited (RCML), a wholly owned subsidiary of the Religare Enterprises Limited. It deals in merchant banking, transaction advisory and corporate finance servicing the Corporate, Entrepreneurs and Investors.

Edelweis is one of the leading investment bank of India. It ranked first in Mid-market Private Equity placements 2007 and IPOs in Mid-market segment in 2008. Edelweiss’ operations are broadly divided into Agency and Capital business lines. The Agency business line includes Investment Banking, Broking - both Institutional and HNI, Asset Management and Investment advisory services. The Capital business line includes Lending and Treasury Operations.

JM Financial is an integrated financial services group, offering a wide range of services. It offers research-based investment advisory and equity broking services to corporates, high net-worth individuals and retail investors across a wide range of financial products.

India Infoline Investment Banking offers service rangeing from Merchant Banking and Mergers & Acquisition transactions to Private Equity and High Yield Debt Syndication for both public and private companies.

Centrum is a financial services company in India with a network of over 75 branches operating in India. It has provides debt and equity services to some esteemed corporates.

It offers investment advisory services with domain expertise in private equity and real estate. It claims to be in capital management business which is beyond the traditional banking and brokerage businesses.

Motilal Oswal Financial Services Ltd(MOFSL) is an Indian Investment Banking firm with wide network of brokerage facility. It services include equity broking, commodity broking, distribution of third party products, investment banking and venture capital management. With over 1500 offices and franchisees in about 500 cities it is a well established brand among retail and institutional investors in India.

Geojit is a leading retail broking house of India. It has a network of over 450 branches in India and abroad. It also provides automated online trading services.

Indiabulls Securities Limited is one of the premier capital markets company and has a strong client base. Its brokerage house was assigned the highest rating BQ – 1 by CRISIL.

IL&FS Investsmart Limited is one of the top financial services organizations providing individuals and corporates with customised financial management solutions.

It is a financial services company promoted by Apollo Hospitals Group. It provides Trading facility in Equity and Derivative segment, commodity segment, IPOs, and MFs. It has 700 offices across the country.

Performance of Indian Navratna companies (contd.)

(Contd. from previous post)

The market performance of the 16 listed Navratna CPSE out of total 18 are as below:

	Market Cap. (billion Rs.)	P/E	P/BV
NTPC	1,483	21.4	2.8
ONGC	1,386	8.9	2.0
BHEL	684	25	6.4
NMDC	602	19.2	7.3
IOCL	522	7.3	1.3
SAIL	327	4.7	1.4
Power Grid	317	20.9	2.3
GAIL	263	10.7	2.0
PFC	150	13.2	1.5
BPCL	139	9	1.2
NALCO	118	7.5	1.3
HPCL	95	7.6	0.9
REC	67	8.3	1.3
Bharat Electronics	62	8	1.9
MTNL	47	8.3	0.4
SCI	34	4.4	0.6
Coal India	Not Listed
HAL

The biggest of them by market capitalization is the power sector giant NTPC with 1.48 trillion rupees ($30 billion). It is trading at 21 times its FY08 earnings because of expected high growth of power sector in India.

Top 10 Banks of India

As of 16 January 2009 the top 14 listed banks of India are:

Name of Bank	Market Cap billion $ *	Sector
State Bank of India	15.26	Public Sector
ICICI Bank	9.73	Private Sector
HDFC Bank	8.21	Private Sector
State Bank of Mysore	3.91	Public Sector
Axis Bank	3.29	Private Sector
Punjab National Bank	2.96	Public Sector
Bank of India	2.75	Public Sector
Kotak Mahindra Bank	2.25	Private Sector
Bank of Baroda	1.82	Public Sector
Canara Bank	1.70	Public Sector
Union Bank	1.60	Public Sector
IDBI Bank	0.90	Public Sector
Indian Overseas Bank	0.75	Public Sector
Central Bank	0.33	Public Sector

Out of 14 banks only 4 are private sector banks emphasizing the important role of public sector banks in the Indian Banking system. The public sector banks are so called as the government is the major shareholder in these banks and has a lot of authority in their policies and actions.

Here are the financials of these banks.

Name of Bank	Assets	Net Sales	Net Profit
State Bank of India	110.32	10.09	1.39
ICICI Bank	60.88	6.35	0.86
HDFC Bank	20.45	2.09	0.33
State Bnk My	5.65	0.51	0.07
Axis Bank	18.08	1.44	0.22
PNB	33.75	2.94	0.42
Bank of India	30.72	2.55	0.41
Kotak Mahindra Bank	4.54	0.52	0.06
Bank of Baroda	29.44	2.44	0.30
Canara Bank	30.45	2.93	0.32
Union Bank	21.44	1.95	0.29
IDBI Bank	22.83	1.65	0.15
IOB	17.44	1.64	0.25
Central Bank	20.97	1.65	0.11

State Bank of India (SBI) is clearly the dominant player in the Indian Banking Industry. It is the only bank of India with profit above 1 billion dollar. However, SBI is very small comparison to the top banks in the world. While Royal Bank of Scotland has assets worth about 2 trillion dollars, SBI's total assets value is about110 billion dollars. It will take some time before Indian banks become significant at the world level.

*The conversion rate of 1$ ~ 48.5 Indian Rupees has been taken for above data.

State Bank of India (SBI) amongst World's top 50 Banks

State Bank of India, the only bank from India to figure in the FT Global 500 list, is amongst the top 50 Banks of the World by market value as on 31 December 2008. The complete list is available here. With a market capitalization of 16.8 billion dollars SBI stands at 43rd rank in the world in comparision to other banks. If Financial Services sector is included SBI ranks 52 with only 0.2 billion dollars less than coming within top 50.

SBI has higher market value than HBOS & Lloyds TSB of U.K., and Wachovia of U.S. It is quite close to U.K.'s fourth largest bank - Barclays which ranks 39 and has market value of 18.5 b$. These ranks are based on market value as on 31 December 2008. Since then Barclays market value has fallen considerably. Today, Barclays has dropped by about 25% to 12 billion dollars. Though market value is changing everyday it is the best measure which ideally(in an efficient market) takes into consideration all the fundmentals of the business.

At todays closing price and exchange rate SBI's market cap is 15.2 billion dollars.

Top 50 Banks of the World by market value

Recently, I was searching for the list of World's top ten banks. I couldn't find any such recent ranking available on free domain. So, I went to the FT's Global 500 (December 2008) list companies and sorted Banks and Financial Services companies. FT publishes top 500 companies based on their market value at the end of every quarter. This list takes the value as on 31 Dec 2008. Here goes the list:

	Company	Country	MCap $b
1	Indl & Coml Bank of China	China	173.9
2	China Construction Bank	China	128.3
3	JP Morgan Chase	US	117.7
4	HSBC	UK	115.2
5	Bank of China	China	98.2
6	Wells Fargo	US	98.0
7	Banco Santander	Spain	75.0
8	Bank of America	US	70.6
9	Mitsubishi UFJ Financial	Japan	70.1
10	BBVA	Spain	45.1
11	Intesa Sanpaolo	Italy	44.1
12	U. S. Bancorp	US	43.6
13	UBS	Switzerland	40.9
14	Royal Bank Canada	Canada	40.9
15	BNP Paribas	France	38.3
16	Citigroup	US	36.6
17	Bank of Communications	China	34.6
18	Westpac Banking	Australia	34.1
19	Sumitomo Mitsui Financial	Japan	32.7
20	Unicredito Italiano	Italy	32.4
21	Mizuho Financial	Japan	31.8
22	Banco Itau	Brazil	30.8
23	Credit Suisse	Switzerland	30.4
24	Toronto Dominion Bank	Canada	29.8
25	Commonwealth Bank of Australia	Australia	29.6
26	Societe Generale	France	29.1
27	Bradesco	Brazil	28.0
28	Royal Bank of Scotland	UK	28.0
29	National Australia Bank	Australia	27.2
30	Bank of Nova Scotia	Canada	27.2
31	China Merchants Bank	China	26.4
32	Hang Seng Bank	Hong Kong	25.1
33	Credit Agricole	France	24.8
34	Standard Chartered	UK	23.8
35	ANZ Banking	Australia	23.0
36	Al Rahji Banking	Saudi Arabia	22.4
37	Deutsche Bank	Germany	22.1
38	China CITIC Bank	China	19.3
39	Barclays	UK	18.5
40	Nordea Bank	Sweden	18.0
41	PNC Financial Services	US	17.1
42	Resona Holdings	Japan	16.9
43	State Bank Of India	India	16.8
44	Banco Brasil	Brazil	16.0
45	Sberbank of Russia	Russia	16.0
46	UniBanco	Brazil	15.8
47	CIBC	Canada	15.8
48	Lloyds TSB	UK	15.5
49	BB&T	US	15.2
50	Standard Bank Group	South Africa	13.7

Source: FT

This was the list of Banks. FT also has a sector category of financial services which may be quite related to Banks. Here is that list:

1	Goldman Sachs	US	33.4
2	Bank of New York Mellon	US	32.5
3	Visa	US	23.5
4	American Express	US	21.5
5	Charles Schwab	US	18.7
6	Merrill Lynch	US	18.6
7	CITIC Securities	China	17.5
8	Morgan Stanley	US	17.0
9	State Street Corporation	US	17.0
10	BlackRock	US	15.9
11	Nomura	Japan	15.8
12	Itausa	Brazil	15.5
13	Franklin Resources	US	14.8
14	MasterCard	US	14.1
15	Chicago Mercantile Exchange	US	13.9
16	Deutsche Boerse	Germany	13.8

Source: FT

PetroChina crosses $1 Trillion mark

PetroChina created history by becoming the first company in world to cross trillion dollar mark in market capitalization. PetroChina's share were listed today in Shanghai stock exchange after it came up with an IPO last month. PetroChina's shares on listing today were trading at triple the initial public offer price. At these prices the valuations certainly look expensive but considering the kind of bull run that Chinese stock market is undergoing the stock can have some upside from these level also. The relative valuation of the Chinese Oil & Gas major can be compared by the fact that the second largest company by market capitalization, Exxon Mobil Corp., is only half of the PetroChina's current market cap when PetroChina is not even in world's top 50 companies by earnings. PetroChina's valuation can only be explained by the future outlook of the company and kind of growth Chinese economy is witnessing.

PetroChina is all set to surpass Exxon Mobil in market capitalization

The biggest listed Chinese company, PetroChina, has recently overtook General Electric to become the world's second-biggest company by market capitalisation, next only to Exxon Mobil Corp. Now, PetroChina is ready to beat Exxon Mobil Corp. This has been eased by the recent IPO which PetroChina came up with for the domestic investors. Presently, it is listed in HongKong and US. After its listing on November 5, its market capitalization is expected to be more than 800 billion USD. Exxon has a market cap of $ 485 billion and PetroChina's combined market cap in the US and Hongkong is about $450 billion.

Earlier PetroChina raised $9 billion in the biggest IPO of the China overtaking the record set by China Shenhua Energy when it raised $8.8 billion from investors last month. PetroCina's IPO is the biggest of this year.

China crosses US in top 10 market capitalization

Five Chinese companies are now in global top ten companies by market capitalization. Chinese stocks have almost tripled in past ten months of year 2007. It is currently trading at P/E ratio of more than 50. PetroChina, which recently has raised $9 billion in the world's biggest initial public offer (ipo) , is all set to become the world leader in market capitalization after it opens for trading in secondary market. Currently PetroChina is ranked second only to Exxon Mobil Corp.

The top 10 companies in world by market capitalization are:

Rank	Company	Country	Approx. Market Cap ($)
1	Exxon Mobil Corp.	US	485
2	PetroChina	China	450
3	General Electric Co.	US	411
4	China Mobile	China	393
5	ICBC*	China	330
6	Microsoft Corp.	US	327
7	Gazprom	Russia	290
8	Royal Dutch Shell	Netherlands	277
9	Sinopec**	China	276
10	China Life Insurance	China	260

*ICBC - Industrial and Commercial Bank of China.
**Sinopec is also known as China Petroleum and Chemical Corporation

Market Capitalization of India and China

India’s stock market index, Sensex, has doubled in two years; China's stock market's index Shanghai Stock Exchange (SSE) has nearly tripled in last 10 months (since the beginning of this year).

P/E ratio of Indian stocks averages 25 while that of China is about 50.

China’s market capitalization $3.5 trillion is more than double of India’s $ 1.6 trillion.

China has five companies in the world’s top 10 companies by market capitalization while Indian companies are yet to enter the list. India’s biggest company by market capitalization, Reliance Industries Limited has recently crossed the $100b mark.

Industrial and Commercial Bank of China (ICBC) has replaced Citigroup from the top position in the banking sector. Three of the world’s top six banks are from China. These are ICBC, China Construction Bank and Bank of China. Chinese companies are now the world’s leader by market capitalizations in banking (ICBC), insurance (China Life Insurance), telecoms (China Mobile) and airlines (Air China).

Similar kind of trend was seen in 20^th century when US companies replaced European companies in the list of world’s top companies by market capitalization.