RBS slips further down global bank rankings as Chinese continue to dominate

In 2009, with a presence in 53 countries and a workforce of 200,000, RBS could claim to be the biggest bank by size in the world, and third by financial strength.

But now 80 per cent owned by the UK government, and forced to retreat back to concentrate on domestic retail banking after its £45bn bailout, the latest standings by financial strength see it further reduced from last year’s position of 15th.

Restructuring and other pressures also weighed on other UK banks, with HSBC falling from fifth place to ninth.

HSBC recently announced plans to slash almost 50,000 jobs from its 258,000 staff and shrink its investment bank by a third to combat sluggish growth across its sprawling empire.

Meanwhile, Barclays slid from 12th to 13th.

Brian Caplen, editor of The Banker, said: “At one time several UK banks were among a handful of truly global players. But since the financial crisis they have reduced their scope and are focusing on fewer areas in a bid to restore profitability. We may have seen the end of the UK-based global bank.”

By contrast, UK banks that focus only on the domestic market are holding steady – Edinburgh-based Lloyds stayed in 22nd position and Nationwide (building society) rose from 119 to 105.

However, the best performers in the global league were Chinese banks.

The report said: “Chinese banks are powering ahead in the ranking but are not filling the gap left by the shrinking international banks.”

ICBC, with whom Standard Life has a partnership, remained top of the pile for the third successive year.

According to the report, ICBC aims to have 10 per cent of its assets outside China in five years’ time, athough it said that his pales in comparison with the traditional global banks in their “heyday”.

ICBC was followed by China Construction Bank, which held on to second place.

China also has three other banks in the top six, with Bank of China moving up from seventh to fourth, and Agricultural Bank of China from ninth to sixth.

Chinese banks were also the most profitable, collectively making 1.75 times the amount US banks make and almost 10 times UK profits. In 2008 UK banks made more than Chinese banks.

Profits and returns at UK banks are slowly recovering although they are still only a third of their peak performance in 2007.

Return on capital is 7.31 per cent – against 4.61 per cent for eurozone banks which more than doubled their profits.