U.S. Banks Pushed Off List of Largest 25 : Japan Takes All Top 10 Spots; Citibank Slips to 28th From 17th

For the first time in decades, no American institution is among the world’s 25 largest banks, according to figures compiled by American Banker, a financial newspaper.

The list of big banks is dominated by Japanese institutions, which captured the first 10 spots and 17 of the top 25.

Citibank in New York is the largest U.S. bank, ranked 28th. A year ago, Citibank was 17th and the only U.S. bank on the list. Bank of America of San Francisco, once the world’s largest bank, is No. 45 and remains California’s biggest institution. Security Pacific of Los Angeles is 87th; San Francisco’s Wells Fargo, 88th, and Los Angeles’ First Interstate, 162nd.

The biggest bank in the world continued to be Tokyo’s Dai-Ichi Kangyo Bank, followed in order by Sumitomo, Fuji, Mitsubishi, Sanwa, Norinchukin, Industrial Bank of Japan, Mitsubishi Trust, Tokai and Sumitomo Trust.

Deutsche Bank of Frankfurt, West Germany, was 11th, and Credit Agricole Mutuel of Paris was 12th.

Donald K. Crowley, an analyst in San Francisco with Keefe Bruyette & Woods, a New York-based investment firm that specializes in banking, said, “American banks have been working under a couple of major constraints, and growth and expansion have been impeded dramatically.”

First, he said, U.S. laws prohibit true nationwide banking. That means that the big American institutions do not have the freedom to expand across the country that banks enjoy in countries such as Japan, France and West Germany.

Second, he said, the dollar was extremely weak at the end of 1987, when the figures were compiled.

“Over the next decade, American banks probably will be climbing their way back into that top 25,” said Crowley, aided particularly by the dismantling of barriers to nationwide banking under way.

American Banker said this was the first year since it began publishing the list 31 years ago that no American bank made the top 25. The newspaper will publish its list of the 500 biggest banks today.

Rankings are based on deposits, and foreign currencies are converted to dollars for the list. The conversion is one factor that helps the Japanese rank high.

Japan’s banks have also grown dramatically through aggressive worldwide lending, particularly on a bank-to-bank basis. According to Fortune magazine, Japanese institutions hold $1.2 trillion in interbank loans, nearly half the world total. The enormous size of Japanese banks also means that cash is readily available for global investments by the nation’s corporations.

Rankings by size, however, often have more symbolic or political value than actual business significance, because they are not indicative of efficiency or profitability.

“Relative size is not particularly significant as long as the bank is large enough to do the sort of business its wants to do,” said Raphael Soifer, a bank analyst at the New York investment firm of Brown Bros., Harriman & Co. “Citibank and Chase are big enough to do what they want to do.”

WORLD’S BIGGEST BANKS

Dollar figures in billions.

1987 1986 1986 Bank Nation Deposits Deposits Rank 1 Dai-Ichi Kangyo Bank Japan $275.3 $186.0 1 2 Sumitomo Bank Japan 257.6 164.5 3 3 Fuji Bank Japan 249.4 166.5 2 4 Mitsubishi Bank Japan 242.2 158.7 4 5 Sanwa Bank Japan 238.2 151.9 5 6 Norinchukin Bank Japan 210.5 144.2 6 7 Indus. Bank of Japan Japan 206.1 137.4 7 8 Mitsubishi Trust Japan 174.9 110.5 13 9 Tokai Bank Japan 167.2 113.3 12 10 Sumitomo Trust Japan 159.3 110.1 14 11 Deutsche Bank W. Germany 155.4 121.6 10 12 Credit Agricole Mutuel France 151.1 113.7 12 13 Banque Nationale France 150.2 121.8 9 14 Mitsui Bank Japan 149.4 104.4 16 15 Mitsui Trust Japan 148.7 98.9 19 16 National Westminster Britain 144.0 107.8 15 17 Credit Lyonnais France 142.1 115.2 11 18 Long-Term Credit Bank Japan 142.0 98.6 20 19 Barclays Bank Britain 139.3 96.8 21 20 Taiyo Kobe Bank Japan 129.4 91.2 23 21 Societe Generale France 128.3 99.1 18 22 Yasuda Trust Japan 124.6 85.9 26 23 Daiwa Bank Japan 124.1 88.3 24 24 Dresdner Bank W. Germany 123.3 95.7 22 25 Bank of Tokyo Japan 113.5 86.7 25

Source: American Banker