Top 1000 World Banks 2026: China’s fragile rise
China’s rise as a banking powerhouse has been one of the most significant developments covered in the pages of The Banker over the past three decades. The trend is once again reflected in the 2026 edition of our industry-leading Top 1000 World Banks ranking, as the country’s lenders tighten their grip at the summit of the global banking industry.
Such gains, however, are becoming increasingly hard-won; much of the growth in Tier 1 capital recorded by Chinese banks over the past two years stems from increased state support, amid a growing list of challenges facing the world’s second-largest economy.
And while absolute size absolutely matters, profitability among China’s state lenders remains significantly lower than their global counterparts, particularly in the US.
As geopolitical tensions between the two superpowers hit new highs in 2025 with the launch of President Donald Trump’s fresh tariff regimes and as the domestic economy languishes, Chinese banks are increasingly seeking growth opportunities beyond their home market, in line with Beijing’s cherished goal of boosting international use of the renminbi in place of the US dollar. Such overseas forays are seen as increasingly crucial to banks’ ability to sustain growth and underpin profits in the years to come.
The cost of dominance
Industrial and Commercial Bank of China first appeared in the top 10 of The Banker’s Top 1000 World Banks ranking in 1997, eventually ascending to the top spot in 2013. It has occupied the number-one position in the ranking ever since, with China Construction Bank, Agricultural Bank of China and Bank of China locking in the top four global positions.
In this year’s ranking, the number of Chinese lenders in the top 10 grows from six last year to seven. In a sign of the changing power (or at least size) dynamics, Postal Savings Bank of China enters the top 10 at the expense of US stalwart Wells Fargo.
Such gains, however, must be seen in the context of massive state intervention by Beijing over the past two years on behalf of what is an increasingly ailing banking sector. PSBC’s rise up the ranks comes as a result of a Rmb130bn ($19bn) government-directed capital raise last year — part of a Rmb520bn programme that also drew in Bank of China, Bank of Communications and China Construction Bank.
The capital raise was one of a series of measures designed to restore confidence in the banking sector, which is increasingly struggling with challenges such as the threat of deflation, higher trade tensions with the US, weak domestic consumption and, significantly for lenders, the ongoing impact of the country’s property debt crisis.
Such challenges have prompted Beijing to set its lowest annual GDP growth target since 1991, putting banks’ growth models under strain, with net interest income hitting their lowest level on record last year.
“The era of rapid relative gains by China’s largest banks is likely behind them,” Alicia García-Herrero, chief economist for Asia Pacific and the Middle East at Natixis, tells The Banker.
“Domestic pressures — namely narrowing margins, slower credit growth, and ongoing exposure to the country’s beleaguered real estate sector — point to more moderate expansion in the immediate future.”
The measures deployed by Beijing have restored a degree of confidence. Fitch Ratings in June revised its outlook for the banking sector from “deteriorating” to “neutral”, noting that China’s integral role in global trade will continue to underpin state banks’ performance.
Such a factor hints at a new avenue for growth going forward, García-Herrero says, as China doubles down on efforts to promote the use of the renminbi as a global trading currency.
“While overseas operations currently contribute a modest share of overall assets and profits for most banks — although the figure is higher for Bank of China — the government’s Rmb tilt will help build resilience and capture cross-border flows,” she says.
Profitability problems
The challenges faced by Chinese lenders are particularly noticeable when it comes to profitability, given the stark contrast with their US rivals. Aggregate return on assets for the 181 US banks in this year’s rankings stood at 1.04 per cent, compared with 0.79 per cent for the entire Top 1000 and just 0.63 per cent for the 143 Chinese banks represented.
While just one of China’s 10 largest lenders recorded a double-digit increase in pre-tax profits for the year, six of the largest US banks recorded such a rise, cashing in on investment banking and trading windfalls brought about at the start of the second Trump administration.
And although JPMorgan, the world’s largest non-Chinese lender, bucked the trend with a 3.3 per cent drop in pre-tax profits for the year (largely due to a $2.2bn credit reserve set up for purchase of Apple’s credit card portfolio from Goldman Sachs) the bank’s ROA of 1.29 per cent stands significantly higher than any other lender in this year’s top 20.
China Merchants Bank tops the overall performance scores for China (generated from 17 indicators and organised across eight categories) thanks in no small part to its high score for profitability. The bank, China’s sixth-largest, is the only one of the country’s largest 40 lenders to register a ROA of more than 1 per cent.
In the US, Capital One comes out on top in the performance ranking, thanks to its high score for growth. The Virginia-based lender is easily the US’s fastest-growing bank in Tier 1 capital terms in this year’s ranking, seeing a 41 per cent uptick thanks to the closure of its acquisition of Discover Financial Services in May 2025.
Goldman Sachs is the best performing of the US investment banking giants, ranking third overall in the country, thanks to high scores for asset quality and return on risk.
Growth areas
After a challenging 2024 across the global banking industry, the three key headline aggregate metrics measured in this year’s Top 1000 ranking — Tier 1 capital, assets and pre-tax profits — all recorded an uptick in growth for 2025.
Particularly significant was a surge in pre-tax profits, which grew by 12.5 per cent in 2025, compared with just 3.4 per cent in 2024. The pause in interest rate-cutting programmes by the Federal Reserve and other monetary authorities enabled lenders around the world to maintain strong net interest income, with the impact of Trump’s tariff policy on the global economy less pronounced than initially feared.
Significantly, the countries driving such increases are very different from last year’s rankings; after being the runaway leader last year, US banks recorded an aggregate pre-tax profit growth of just 7.7 per cent in the 2026 list, held back by the minor decrease posted by JPMorgan.
Many of Europe’s largest lenders experienced strong returns to fortune thanks to a combination of structural hedges and higher loan growth, even as the European Central Bank cut rates in the early part of the year.
German lenders posted a significant turnaround to record a 39.2 per cent increase in pre-tax profits for the year, compared with a drop of 4.5 per cent in 2024. Deutsche Bank led the way with its largest annual profit in nearly two decades, on the back of higher fixed-income and currencies revenues. The country’s second-largest lender, DZ Bank, saw its pre-tax profits rise by 46.4 per cent, with earnings from its co-operative and commercial banking rising nearly 85 per cent for the year.
Yet it is DekaBank, Germany’s 12th-largest lender, that emerges as the country’s best-performing bank, narrowly holding off Deutsche Bank and DZ Bank due to its high scores for liquidity, soundness and leverage.
French banks also recorded a marked improvement in pre-tax profit growth to 15.5 per cent, compared with just 3.3 per cent the previous year, as a favourable interest environment lifted retail banking revenues.
While the lower interest rate environment put pressure on net interest margins across Europe, French lenders benefited from rate cuts introduced by the country’s finance ministry on regulated savings vehicles, says Fabio Iannò, a senior credit officer at Moody’s Ratings.
“The rate cuts reduced the interest banks pay on these savings accounts, which account for around 25 per cent of sector customer deposits and can be relatively costly for banks when rates are high,” he tells The Banker.
Crédit Agricole, the country’s largest lender, remains in 13th place in the Top 1000, while BNP Paribas and Crédit Mutuel move up two and three places, respectively.
Despite falling three places in the overall ranking to 35th, Société Générale is France’s best performer, posting leading scores for profitability, operational efficiency and return on risk.
UK banks saw a more modest overall improvement in their pre-tax profit growth, which rose from just 2.8 per cent in 2024 to 9.9 per cent in 2025. The increase comes despite a drop in profits by HSBC, which remains Europe’s largest bank, prompted by costs related to the restructuring launched in 2024 by chief executive Georges Elhedery, and a $2.1bn impairment on its stake in China’s BOC, following the latter’s recapitalisation.
NatWest Group led the way among UK lenders, posting a 32.8 per cent pre-tax profit rise on the back of strong growth at its private banking and wealth divisions. The rise prompted the purchase of wealth manager Evelyn Partners, the bank’s largest acquisition in 20 years.
NatWest ranks second in the UK’s best-performing ranking, with Coventry Building Society beating it to the top. The country’s 11th-largest lender by Tier 1 capital takes the prize thanks to leading scores for growth, profitability and return on risk.
Industry health check
The Banker’s Top 1000 World Banks ranking is a snapshot of an industry that is broadly in good health. The ratio of Tier 1 capital to assets for the banks in the ranking, while slightly lower than in 2025, stands close to the highest level recorded over the past 10 years.
After enduring 2025’s tariff shocks, the global economy faces “a major test” from the dramatic conflict escalation in the Middle East this year, the IMF has warned, with other clouds on the horizon.
“A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding AI-driven productivity, or renewed trade tensions could significantly weaken growth and destabilise financial markets,” the fund warned in April.
The severity of such challenges is nothing new for the world’s largest banks. If The Banker’s 100-year history of covering the industry has taught us anything, it’s that lenders have, for the most part, remained resilient and adaptive to each new threat they encounter, and are likely to rise to whatever challenges come their way in the near future.
It would be irresponsible, however, to downplay the impact of crises such as the 1929 Wall Street crash, the bursting of the Japanese asset bubble in the early 1990s, or the global financial crisis on banks, economies and millions of individual lives.
The tributes to and criticisms of the late Fed chair Alan Greenspan — who passed away shortly before The Banker went to press — are a timely reminder of the delicate balance between setting banks free and reining in their worst excesses via appropriate supervision, at a time when banking regulators around the world consider looser capital requirements.
Additional reporting by Kimberley Long and additional research by Valeria Yakutovich and Mohit Sodhani