China Construction Bank ranks first among the top 20 Asia-Pacific banks

As economic activities nearly reached pre-COVID-19 levels in 2021, most of the top 20 APAC banks experienced substantial growth in their revenue streams.

Overall revenue increased 11.4% to $ 1.5 trillion, reveals GlobalData, a leading data and analytics company.

China continues to dominate the APAC top 20 by revenue with 13 banking institutions, followed by Japan (3), South Korea (3) and India (1).

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There were 14 banks, which recorded double-digit revenue growth, including 12 from China. The best performers were Postal Savings Bank of China (PSBC), China Merchants Bank (CMB) and China Construction Bank (CCB), which recorded growth of more than 15%.

PSBC’s impressive growth was driven by 8.5% growth in interest income, a 29.4% increase in commission income and a 45% increase in net earnings from investment stocks.

Both CMB and CCB also recorded growth in interest income, commission income, net trading income and net income from investment stocks.

Parth Vala, Business Profile Analyst at GlobalData, comments: “Over the past year, China’s outstanding micro and small business loans have grown 17% from 42.7 trillion yuan to 50 trillion yuan.

The assets of the large commercial banks have grown by about 8% per year. A growing loan portfolio coupled with stable asset quality (NPL of 1.7%) helped the industry post a net profit of 2.2 trillion yuan, reflecting a 12.6% year-over-year increase.

The best-performing non-Chinese companies that have seen double-digit growth are Mizuho Financial and KB Financial. Mizuho Financial’s revenues increased 13.2% on the back of a 23.2% increase in interest income and 162% increase in trading income.

KB Financial’s revenue growth was driven by a 5% increase in its interest income due to approximately 8% growth in its loan portfolio. This was further reinforced by a 22.5% growth in net fees, driven primarily by credit card fees due to consumer growth.

Rising brokerage revenue and improving investment banking activity, given the record stock market, also spurred the bank’s revenue growth.

On the other hand, Hana Financial recorded an 11.3% decline in revenues, mainly due to lower revenues from non-interest activities, including the net loss on financial instruments designated as measured at the FVTPL, the 70% decrease in net gain on instruments valued FVOCI, loss on derivative assets used for hedging purposes and 87% decrease in profit on foreign exchange transactions.

The GlobalData analyst concluded that “2022 has brought its new challenges with a rapidly changing geopolitical landscape, growing supply chain constraints, rising energy prices and a rigid blockade in China. With these headwinds, major APAC banks are likely to struggle to sustain the recovery achieved in 2021 “.

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