Top banks’ assets expanded 5.1% in 2023

HSBC is a top performer, whilst China Merchant’s Bank saw fees decline.

The world’s Top 25 banks– including 6 Chinese megabanks and 1 Japanese bank– saw a combined topline growth of 33.3% in 2023, with assets expanding 5.1% during the year, according to data and analytics company GlobalData.

HSBC and Lloyds Banking Group emerged as the year’s top performers, posting a growth of 78.3% and 85%, respectively. Societe Generale also registered a topline growth of 75%.

Lloyds Banking Group made a notable turnaround from losses in 2022 to a gain of £18.049m in 2023, propped up by a £38.04m increase in its net trading income. It also logged a 59% increase in its net interest income, driven by stronger margins and higher average interest-earning assets.

“This growth included expansions in the open mortgage book, retail unsecured loans, and the European retail business,” said Murthy Grandhi, company profiles analyst at GlobalData.

HSBC Holdings also achieved a 90% growth in interest income, propelled by higher market interest rates and strong income from its insurance businesses.  

Societe Generale reported a 72.7% growth in interest income in 2023, driven by a 47% rise in customer loans and deposits and a 67.3% increase in non-interest income.

In contrast, China Merchants Bank suffered a 2.1% decline in fee and commission income, noted GlobalData. This was due to a decline in fees from its wealth management, asset management, and bank card fees.

China Merchants Bank also reportedly faced challenges such as insufficient effective credit demand and the continued downturn of the Chinese capital markets.

Chinese banks continue to be beset with challenges in Q1 2024. Combined net profits fell by 0.81% during the quarter, according to a separate report by EY, with combined fees contracting for the first time in 5 years.

“Despite the ongoing macroeconomic challenges, the banks demonstrated resilience and achieved robust revenue growth, primarily attributed to a notable increase in interest income, thanks to higher interest rates and booming global equity markets,” GlobalData's Grandhi said.

In terms of profitability, UBS and HSBC stood out. Profitability growth of the two banks over the past five years registered a compound annual growth rate (CAGR) of 45.3% (UBS) and 26.1% (HSBC), respectively. 

Citigroup and Societe Generale, meanwhile, experienced a decline in profitability, with a negative CAGR of 13.8% and 6.8%, respectively.

“Amongst the top 25 banks by revenue, only UBS Group and Goldman Sachs reported a 10% CAGR in total assets over the past five years,” Grandhi said.