HSBC unseats US banks

The Hongkong and Shanghai Banking Corp. (HSBC) had reportedly topped the world’s top 1,000 banks based on a survey done by the Banker magazine.

HSBC takes the crown following nine years of US domination and jumps two places from its third position last year. Others that took the top five slots are the Citigroup, Royal Bank of Scotland, JP Morgan Chase and Bank of America.

According to a statement, HSBC leads the ranking by virtue of its tier one capital of $105 billion, some $17 billion ahead of its nearest rivals, and its bumper profits.

The survey found that US banks account for just 14 percent of aggregate top 1,000 pre-tax profits, down from 24 percent last year. Asian banks have risen to 19 percent from 12 a year ago. European banks stayed steady at 41 percent.

In April, the group headed Forbes Magazine’s 2000 list of the world’s largest companies – the first non-US company to lead the rankings.

Tier One capital is often used to determine the strength of a financial institution. The current credit crunch has seen falls in the tier one of many banks.

“While HSBC has undoubtedly been affected by global economic conditions, it was one of the first to put measures into place to deal with any fallout, while its diversified business and conservative lending strategy means it has suffered less than many of its peers,” it added.