The Financial Times of Monday March 23rd provided one of the most graphically legible league tables of current times, showing where the future financial power of the world may lie. Lending some strength perhaps to the already widely held views that this could be the Asia Century.
In 1999, of the top 20 banks by market capitalisation, 11 of them were American. The Europeans had 7 and the last two were from Japan. By 2009, a mere ten years later, 8 were from the Asia Pacific (China, Japan, Australia) - with the top 3 spaces taken by Mainland China, and another 2 Chinese banks in the top 20. In addition, and with tongue only slightly in cheek, it could actually be 9 from AsiaPac if you still believe that HSBC is fundamentally an Asian bank!
Citigroup at present has a market cap lower than that of my friends at Hang Seng Bank in Hong Kong, and lower than 5 Canadian Banks, none of whom even featured in the top 50 just 10 years ago. A shift in geographies where in 1999 Asian institutions comprised 16% of the total and today make up 32%.
I may be old, but I'm not that stupid! Of course these positions have been taken at a "snapshot" in time and use just one measure of comparison. Of course they can, and will, change over time - although how much time is anyone's guess.
The point is this. Asian banks have risen to the fore. I do believe that they have better structured balance sheets than before and that they are generally much better regulated than before - or have continued to be well regulated over time in the case of the Australian and Hong Kong banks.
But they must continue to pay attention to their businesses and their risks if they are going to seize advantage of the ratings they currently enjoy. The tables only tell a part of the story. The Asian banks have, in overall terms, come to the top quickly, but they will make more progress with less haste I suspect.
Given the financial resources available in the Middle East, it now needs some appropriate consolidations to put a couple of GCC banks into the league tables. And then the ancient silk road will, with the combined energy of both the Middle East and Asia, once again become a formidable trading empire. Some may think this fanciful given the current situation but it was already happening before the crisis, Ties were building and now continue. Singapore is still thinking 20 years ahead, while others think about the weekend.
And even Dubai (I am in the Gulf right now - watch this space), with a cooperative rest of the UAE, an awakening Saudi Arabia and other countries expanding, might yet spring some surprises.
I am so sorry to make some mistakes.
David what do you think about China?
I want to know what you think about her.
Posted by: Oscar | 12 April 2009 at 18:25
Just so there is no confusion, in relation to the comment "...please do me a favour, please tell your CEO..." - I retired from HSBC almost 4 years ago - in May 2005. I have no CEO to whom to tell anything!!
Posted by: David Eldon | 09 April 2009 at 05:09
David, i have no idea for you mother town. But i am sure you are hongkongese.
"According to the Financial Times, the ranking of HSBC in 1999 was No. 4; in 2009 it was No. 5 but of course the market capitalisation in 1999 was USD93.7bn and USD78.3bn in 2009."
David as you say do not take a snapshot on the view.As i say to other persons, lion bank was "hong-kong-national-bank".(i am so sorry that i am not sure for now.In my mind, lion bank is hong kong National Bank,that is "unreplacable". )If hong kong bank suffers from any diffculty,i sure all hong kong people including you and i will do a stupid thing to help HSBC.The elephant is "too big to fall/dead" even she is taken many arrays.112 billions seems too big. As we seen, no one in hong kong want to sell HSBC stock.(of course, selling stock is a normal part of the market.)Indeed, i am pround to be a stockholder of HSBC. David, please do me a favour, please tell your CEO(紀勤） do not lack confidence of HSBC.(do not comment too much on HSBC in this blog, as it is not convenience.
Posted by: Oscar | 07 April 2009 at 18:01
According to the Financial Times, the ranking of HSBC in 1999 was No. 4; in 2009 it was No. 5 but of course the market capitalisation in 1999 was USD93.7bn and USD78.3bn in 2009. Not a bad performance under the circumstances, and in comparison with others.
In relation to your comment about "sadly for you" - on the contrary I don't find it sad at all. HSBC obviously followed its nose to where the growth and the potential was even at that time - and it is still doing so. Why do you think Hong Kong is my home?
Posted by: David Eldon | 01 April 2009 at 23:05
David
Can you tell in what is the ranking of HSBC in 1999?
i believe you. In 1888 China had over 25%GPD in the world Gpd. In fact, it might be sadly for you, china was bigger than UK at 1888.Even uk is a factory in the world. Oscar
Posted by: Oscar hui | 01 April 2009 at 20:03