The shocking 85.3% collapse in profits reveals the full extent of the carnage in the global banking system. After four years of above 20% profit growth, last year’s figure, based on full-year 2007 figures, stayed relatively flat with a loss of 0.7%. Because aggregate bank profitability (total pre-tax profits to total Tier 1 capital) was still a handsome 20% in 2008’s ranking (slipping from a record 23.4% in 2007), it was hoped that healthier parts of the financial system would be able to offset losses in US and Europe.Below is a chart of the top 10 losses.
This year, however, aggregate profitability has sunk to just 2.69%.
For the first time in the Top 1000’s 39-year history, the top 25 banks – which account for almost 40% of the Top 1000’s Tier 1 capital and almost 45% of its total assets – recorded a loss, which totalled $32.37bn (-28.1% of Top 1000 profits). Stripping out the profits of the lower reaches of the Top 25 means that the top five banks fared even worse. Representing 13.4% of total Tier 1 capital and 12.3% of total assets, the top five banks lost a staggering $95.8bn (-83.3% of total profits).
Citi came in a close second. Don't give up Citi... there is always 2010.
Source: The Banker