|CHINA'S BIG BANKS ECLIPSE US RIVALS|
Aruba, November 5, 2015 - There are four banks in the United States with assets over $1 trillion and at least four big banks in China that have assets of a comparable size. The difference is: The banks in China are surging in size. The banks in the U.S. are not. That means the Chinese banks are headed toward global domination of the world banking industry.
In 2004, the first year for which I have good numbers, the four U.S. banks – JPMorgan Chase, Bank of America, Citigroup and Wells Fargo -- had $4.2 trillion in assets. The four big Chinese banks – Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China – had $2.1 trillion.
As of the third quarter of 2015, those numbers have changed dramatically: The U.S. banks have $8.1 trillion in assets, while the Chinese banks have $11.8 trillion.
The shift in power is even more dramatic if one looks at the net profits of both sets of institutions. In 2004, the four U.S. banks had a total of $42.7 billion in profits, while the Chinese banks had $12.6 billion. If we use the third quarter of 2015 to make a current comparison, and we annualize the figures, we see that the U.S. banks now have $86.4 billion in net profit and the Chinese banks have $141.2 billion.
The Industrial and Commercial Bank of China made more money in the third quarter than JPMorgan Chase and Wells Fargo combined. From an asset standpoint, the smallest of the big four in China, the Bank of China, has more assets than JPMorgan Chase, the biggest bank in the United States.