State Bank of India (SBI) is the only Indian bank in the Top 17 BRIC banks, as listed by Global Finance, an international finance magazine. This list gives details of the Top 50 banks in the emerging markets, especially the BRIC nations. Top 20 of this list comprises banks from the BRIC nations and South Korea, with South Korea occupying the last 3 slots. This list is generated based on the total assets of the banks. Public sector banks dominate the market right now in terms of their sizes. Government owned banks make up about 70 percent of the banks in India, 50 percent in China and 40 percent in Russia and Brazil. It is surprising to see 10 banks from China in the Top 17 BRIC banks. Moreover, it is surprising that despite 70 percent of our banks being government run, only one Indian bank is present on the Top 20 list. Other Indian banks that are present in the list of Top 50 emerging markets banks are – ICICI 35th, Punjab National Bank 39th, Bank of Baroda 42nd, Bank of India 43rd and Canara Bank 47th.
State Bank of India (SBI) is the largest government owned bank in India. It is also the oldest bank in the country. Established during British Raj, SBI has flourished tremendously in the last two centuries. It has more than 13,500 branches in the country and has the most rural reach. It also has nearly 155 branches in about 30 countries all over the world, including – Nigeria, Canada and U.S. SBI also has the most number of ATMs in the country. It provides various services like – car loans, home loans, fund management, commercial and factoring services and the like. SBI is the only bank which has various tie-ups with NGOs. SBI is at the 14th position of the Top 17 BRIC banks, with an asset value of $274,411. Chairman of SBI is Pratip Chaudhuri said “One reason that SBI is doing so well presently may be its reach in the interiors of the country, which expands the customer base to a great extent. SBI also pays great attention to the instructions of Reserve Bank of India (RBI).
China has the most number of banks in the Top 17 BRIC banks list. It has 10 banks which are present in the list. These banks are positioned based on their asset values. The top banks are as follows – Industrial & Commercial Bank of China – $2,032,134; President – Yang Kaisheng, China Construction Bank Corporation – $1,632,263; Chairman – Wang Hongzhang, Bank of China – $1,579,348; Chairman – XIAO Gang, Agricultural Bank of China – $1,568,722; Chairman – Xiang Junbo, China Development Bank – $771,729; President – Jiang Chaoliang and Bank of Communications – $596,656; Chairman – Hu Huaibang. Though surprising, China’s growth in the banking sector has been tremendous mostly because of tight governmental control. Since, majority of the Chinese banks on the list are controlled by the government, there is better management and administration.
Other Chinese banks present on the list are – China Merchants Bank with an asset of $362,758, China CITIC Bank with an asset of $314,260, China Minsheng Banking Corporation with an asset of $275,368 and China Everbright Bank; with an asset of $224,064. Other Chinese banks on the list are – Hua Xia Bank with an asset of $157,081, China Guangfa Bank with an asset of $123,585 and Bank of Beijing with an asset of $110,708. According to RNCOS, a market research and information analysis company Compound Annual Growth Rate (CAGR) of the banking industry in China will be nearly 14 percent by 2014. The banking sector is doing very well in spite of economic slowdown in the country. A few reasons behind this trend can be – improved demand for financing, both among corporates and households. Also, economic status of China is improving, with lesser currency depreciation than India. Still, China needs to improve its transparency and risk management in the banking sector.
Brazil has faced its share of social, political and economic turmoil. Despite the hardships, it has made great progress over the years and currently has 5 of its banks in the Top 17 BRIC banks. The banks present on the list are – Banco do Brasil – 7th; with an asset of $481,179, Itaú Unibanco – 8th; with an asset of $447,925, Banco Bradesco Brazil – 9th; with an asset of $378,150, Caixa Economica Federal – 15th; with an asset of $237,640 and Banco Santander-Brasil – 16th; with an asset of $229,690. According to Thomas White, a global investing firm, the banks of Brazil are examples of optimism. Since, unemployment has almost halved from 2003, there is more spending power in the hands of the working and middle-class people. Also, the mortgage lending section of the banking sector of the country is expected to grow in the coming years. Moreover, it has a good credit rating, according to Serasa Experian, a financial rating company. Brazil is also aiming at creating a positive credit registry. Despite the ups and downs witnessed by Brazil
Russia does not seem to be performing very well in the banking sector because only one Russian bank has made its way in the Top 50 banks in the emerging markets. The only Russian bank on the list is – JSC VTB Bank – 25th; with an asset of $140,792. This is a rather dismal performance considering the size of the country. The reason behind this may be because of 2008-09 world economic crisis, when the oil prices decreased and the foreign reserves of Russia hit almost rock-bottom. The Central Bank of Russia provided $200 billion to help its economy but it couldn’t redeem the whole situation. Despite the money provided by the government, the stability in the country did not last long. So, the banking sector is still suffering. Russia will have to brace itself for tough competition from other BRIC nations, especially in the banking sector, in order to improve its situation.
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