The Commonwealth Bank of Australia (CBA) and Westpac have been ranked in the top 25 banks globally, with the performance of the top publicly listed global banking institutions for 2017 revealed by GlobalData, a leading data and analytics company.
The analysis disclosed the top nine players in 2016 maintained their place in the top nine last year despite some minor positional movements, with JPMorgan Chase having maintained the top position for both years.
Lead analyst at GlobalData, Amal George, said the majority of the top 25 companies did not have a similarly good run, with an overall average revenue decline of 4.1 per cent.
This was evident in Australian banks, with CBA and Westpac having dropped two and four spots respectively, sitting at 12th and 20th in 2017.
The analysis showed that the top 25 continued to have adequate liquidity with an average loan-to-deposit (LTD) measure of 77.8 per cent. CBA and Westpac saw an average LTD ratio of over 100 per cent, however, indicating a dependence on wholesale funding.
The average of net interest income to net revenue was 56.6 per cent for the top 25 while the top 10 reported a slightly better average of 57.8 per cent.
‘‘In 2018, the banks are expected to continue to revamp their legacy systems into a more robust, simple, and modern IT infrastructure that has the capability to integrate new solutions with minimal internal disruption,” said George. “They are likely to leverage data analytics more than ever before to offer customized product offerings.”
“Mobile Technology is fast changing the way banking is done in terms of customer experience and pushing operating margins,” he added. “On the regulatory side, changes such as the material rewrite of the Volcker Rule, proposed creation of intermediate holding companies for local banks in the EU and the transparency requirements of MiFID II could continue to drive changes in the banks’ strategies and market structure.’’
Adoption of FinTech technologies remained another focus for banks, with the world’s leading 22 banks having developed the blockchain-based international payments system.