Top 25 banks defy inflation and geopolitical risks with impressive revenue growth in 2022. Despite facing challenges such as high inflation and the Russia-Ukraine war, the top 25 global banks experienced remarkable growth in both revenue and total assets, according to GlobalData.
All of the top 25 banks reported year-on-year revenue growth, with Banco do Brasil, Itau Unibanco, and Banco Santander emerging as standout performers, achieving over 40% growth.
Commenting on the results, Murthy Grandhi, Company Profiles Analyst at GlobalData, highlighted Banco do Brasil's success, attributing it to an 87.8% increase in interest income and a 27.6% growth in non-interest income. The bank's strong performance in credit, along with a well-balanced mix of liquidity assets, interbank investments, and securities operations, contributed to its impressive growth.
Similarly, Itau Unibanco saw a significant 47.2% growth in interest income, driven by an expanding loan portfolio and a shift towards a more favorable product mix. Increased commissions and banking fees from higher transaction volumes in credit and debit card activities further fueled a 34.1% rise in non-interest income.
Banco Santander also delivered outstanding results, with a notable 53.7% growth in interest income and a 13.1% increase in non-interest income. The bank's success can be attributed to higher volumes and interest rates, proactive spread management, and increased commercial activity leading to a rise in net fee income.
In contrast, Wells Fargo faced challenges in net gains from equity securities, mortgage banking, and investment advisory, as well as lower asset-based fees. The bank's revenue also declined due to the disposal of select businesses in 2021.
Grandhi noted that despite the Russia-Ukraine war and rising inflation, the banks rebounded from the setbacks caused by the pandemic. Their resilience and robust revenue growth were primarily driven by an increase in net margins, which was largely influenced by the upward trend in interest rates.
Examining profitability growth over the past five years, Banco do Brasil and China Merchants Bank stood out with compound annual growth rates (CAGR) of 24.6% and 14.4% respectively. On the other hand, Sberbank Rossii and Societe Generale experienced declines in profitability, with negative CAGRs of 24.2% and 16.3% respectively, representing the opposite end of the growth spectrum.
Agricultural Bank of China achieved remarkable year-on-year growth of 16.7% in its total assets. This significant increase was primarily driven by growth in net loans and advances to customers, financial investments, and cash and balances with central banks. In contrast, Bank of America experienced a 3.7% decline in total assets, mainly due to lower debt securities and reduced cash and cash equivalents.
Grandhi emphasized that among the top 25 banks by revenue, only Goldman Sachs, China Merchants Bank, Agricultural Bank of China, Itau Unibanco, China Construction Bank, Postal Savings Bank of China, and State Bank of India reported a 10% compounded annual growth in total assets over the past five years.
