Big four most profitable banks in the world Big four most profitable banks in the world by Mackenzie McCarty24 Jun 2013 Most Discussed APRA clarifies stance on interest rate buffers The regulator has also shed light on serviceability and questioned the use of tests such as the Henderson Poverty Index Australia’s big four banks have been ranked most profitable in the world for the third year running, according to Bank for International Settlements (BIS) data. Last year, the major lenders made better returns than banks in 10 other developed nations, including the US, Britain and Europe – and total profits this year are expected to exceed $26 billion. The Swiss-owned BIS says pre-tax profits for the majors were equal to 1.18% of their total assets, putting Australian banks far ahead of other wealthy countries on the list. According to News Ltd, only lenders in the emerging economies of Brazil, Russia, India and China are making better returns. Consumer group Choice head of campaigns, Matt Levey, told News Ltd the figures undermined bank claims that that conditions are tough. ''It shows we have inadequate competitive pressure in that market.

We still have don't have a situation where consumers are willing enough to look beyond the big four banks,” said Levey. ''These are institutions which enjoy a privileged position in the community. They are supported to a huge extent by government and taxpayers and in return I don't think we are seeing the amount of competitive pressure that we deserve to see.” But Australian Bankers’ Association CEO, Steven Münchenberg, tells Australian Broker that the fact Australian banks are doing so well has less to do with inadequate competition – and everything to do with the nation’s economic situation. “Banks are more profitable in countries that have stronger economies. It’s not surprising that banks in Europe, where there’s a recession, are less profitable than those in Australia or Canada. The Australian and Canadian economies are growing,” says M nchenberg. “There is actually a lot of competition in Australia; there’s over 100 providers of mortgages and consumers are not afraid to exercise that choice.” Furthermore, he adds, major bank profits, when measured by return on equities, are less than they were before the GFC.

“We’re always open to suggestions to improve the situation and we’re always open to sensible policy, but I don’t think there’s a lack of competition in Australia.” Big four on top of the world for profitability, says BIS Big four on top of the world for profitability, says BIS Link Source: Bank for International Settlements. Australia's major banks are the most profitable in the developed world, the Bank for International Settlements says, in figures that highlight the big four's consistently high returns as an inquiry investigates competition in the sector. The major banks' pre-tax earnings as a share of their total assets rose to 1.28 per cent in 2013, higher than 10 other developed countries, the influential BIS said in its annual report on Sunday night. It is the fourth consecutive year in which the sector's profitability has been the highest among developed countries assessed by the BIS, including Britain, the United States, Japan and various European nations. The comparison also showed Commonwealth Bank, Westpac, National Australia Bank and ANZ have wider net interest margins and lower costs than most of their peers overseas.

The US had the next most profitable banks, with earnings of 1.24 per cent of assets, followed by Canada, where returns were 1.06 per cent. The only nations with higher profitability on the annual list were the fast-growing emerging or BRIC economies – Brazil, Russia, India and China. The BIS said lenders around the world were benefiting from improving profitability and building up capital faster than expected as they recovered from the global financial crisis. Advertisement But Australia's stand-out profitability comes as the financial system inquiry being led by former Commonwealth Bank chief executive David Murray also examines the intensity of competition in the industry. Regional banks, consumer groups, credit unions and building societies are calling for changes to whittle down the big four's advantages, especially in the $1.3 trillion mortgage market. Chief executive of the Australian Bankers Association, Stephen Munchenberg, said the profitability of the country's banks reflected the relatively good shape of the economy, not a lack of competition. "We've got stronger economic growth and we've got lower unemployment than a lot of countries," he said. "The banking industry believes that markets and bank products are competitive," he said.

Mr Munchenberg said ABA members – which include the regional banks – believed banking was competitive but it supported Mr Murray looking at how to lift competition further. "If there are barriers to further competition, the inquiry should look at those being removed," he said. Buoyed by very low bad debts, Commonwealth Bank, Westpac, National Australia Bank and ANZ are tipped to make combined profits of $29.7 billion this year, according to Morningstar estimates. Mr Murray is due to deliver an interim report in mid-July, and senior Treasury official David Gruen last week said one issue on the agenda was the balance between promoting a competitive financial system and one that was stable. Morningstar's head of banking research, David Ellis, said he did not think Mr Murray's report would recommend major changes that would upset the industry's earning capacity. The high earnings were explained by falling bad debts and the big four's strong market position, he said.

"Bad debts have been falling since 2009, which has lifted profitability." The BIS said Australian bank net interest margins – a gauge of banks' cost of funds compared with what they are charging for loans – were 1.79 per cent of assets, behind Spain and the US among developed nations. Operating costs were 1.11 per cent of assets, the third-lowest behind Sweden and Japan. With global interest rates at record lows, the BIS argued the key challenge facing central banks was returning borrowing costs to more normal levels. Advertisement 2013 - Top 1000 - Top 1000 Top 1000 World Banks 2013 July 1, 2013 The rise of China and decline of the eurozone are two themes that continue to dominate the top end of the Top 1000. But some equally significant changes are taking place further down the rankings.

A new entrants list of two halves July 1, 2013 Organic growth from developing markets in Latin America and Asia and mergers of conversions in the developed world provide the stories behind the majority of new entrants in the 2013 Top 1000 World Banks ranking. Emerging market risks rising July 1, 2013 Risk weightings on assets have increased for many emerging-market regions, but the very low level of risk-weighted assets in Europe looks disconnected from the deteriorating asset quality in the region. Summary of the Top 1000 World Banks Brian Caplen, editor of The Banker, provides a summary of the Top 1000 World Banks Ranking results for 2013. Developing world enjoys best return on assets July 1, 2013 It comes as little surprise to see emerging economies such as Kenya and Indonesia leading return-on-asset rankings, though China's relatively low scores may raise a few eyebrows. China dominates net interest rankings July 1, 2013 China's banking dominance has extended into the net interest income rankings, though the trading income tables have a more old-world feel to them.

Western Europe's state of inertia July 1, 2013 Little has changed among the leading western European banks over the course of the past year, despite the best efforts of the region's authorities. South Africans slump while the rest of Africa rises July 1, 2013 South Africa's lenders still dominate Africa's banking landscape, but their sluggish 2012 means that the rest are making up ground. Asian growth comes from all quarters July 1, 2013 On first glance, the Asia-Pacific top 25 excluding China and Japan has a familiar look to it, with Australian banks dominating. However, closer examination shows growth stories from across the whole region. China: four giants and number one in the world July 1, 2013 Home to the largest bank in the world by Tier 1 capital – Industrial and Commercial Bank of China – and three other members of the top 10, China's dominance at the top of the global banking scene is now there for all to see. Japan's banks slide as China marches on July 1, 2013 The sluggish growth that has existed in Japan's banking sector in recent years shows little sign of ending.

Middle East banks continue to take small steps forward July 1, 2013 Slow but steady growth seems to be the order of the day for banks in the Middle East, with most countries in the region having something to cheer. Measures of soundness inch upwards July 1, 2013 Soundness levels among the world's banks are showing a slight sign of improvement, though familiar names still feature at the top of the rankings. A new entrants list of two halves July 1, 2013 Organic growth from developing markets in Latin America and Asia and mergers of conversions in the developed world provide the stories behind the majority of new entrants in the 2013 Top 1000 World Banks ranking. Emerging markets take profits crown July 1, 2013 Banks from the emerging markets in Latin America and the Asia-Pacific region dominate this year’s most profitable banks, leaving European banks with only two countries in the top 25 ranking. Asia-Pacific dominates global stage July 1, 2013 The Asia-Pacific region retains its global dominance, with the most banks in the Top 1000 and the biggest share of Tier 1 capital.

Developing countries top for efficiency July 1, 2013 Emerging markets are coming up trumps in terms of bank cost-to-income ratios, with Africa the top ranking region and Qatar the top ranking country. Brazil's big four maintain Latin American dominance July 1, 2013 Although Brazil's largest four banks remain well clear of the pack in Latin America, there were promising developments in Colombia, Mexico and Venezuela in 2012. Highest Movers table shows story after China July 1, 2013 The Highest Movers table of the Top 1000 has had a distinctly Chinese feel to it in recent years, but 2013's ranking shows rapid growth among financial institutions the world over, including in Europe's crisis economies. The 10 Most Profitable Companies in the World You are using an older browser version. Please use a supported version for the best MSN experience. The 10 Most Profitable Companies in the World By Alexander E.M. Hess and Thomas C. Frohlich of 24/7 Wall St.

| < PREVIOUS SLIDE SLIDE 1 of 11 NEXT SLIDE > All eyes are on Apple right now With the recent release of the iPhone 6 and iPhone 6 Plus, Apple is again the focus of the financial world. Already in its opening weekend, Apple (NASDAQ: AAPL) sold 10 million iPhones, breaking its previous record. With massive sales of cutting-edge, high-margin electronics, Apple is now the second most profitable company in the world. The only company with a higher profit is the Industrial and Commercial Bank of China. Based on data provided by FactSet on companies’ net income before discontinued operations and extraordinary items for their latest fiscal year, these are the world’s 10 most profitable companies. Income from continuing operations — which excludes extraordinary and discontinued items from earnings — is an important indicator of the profitability of a company’s core business. By contrast, net income, the standard all-encompassing measure of profits, can include items that do not reflect underlying profitability of a business. For example, Vodafone (NYSE: VOD) had $17.7 billion in net income from continuing operations, making it the 18th most profitable company in the world.

However, this did not include the sale of its 45% stake in Verizon Wireless to Verizon Communications. Had these figures been included, Vodafone would have been the most profitable company in the world. Of the 20 most profitable companies, nine are based in the United States. These include two banks, Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM); two energy companies, Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX); and two technology giants, Apple and Microsoft (NASDAQ: MSFT). Conglomerate Berkshire Hathaway (NYSE: BRK-B) is also among the most profitable companies. In all, four industries account for the majority of companies among the world’s most profitable. Seven companies are in the energy industry, led by Gazprom and ExxonMobil, the most of any sector. Six of the most profitable companies are banks, with four based in China, and two based in the U.S. Three telecom giants — AT&T (NYSE: T), China Mobile (NYSE: CHL), and Vodafone — are also among the 20 most profitable companies by normalized earnings.

Finally, Apple joins Samsung Electronics and Microsoft to make up the technology companies on the list. Overall, six companies on this list are based in China. Each of these companies is majority-owned by the Chinese government. The two Russian companies among the 20 most profitable companies, Gazprom and Rosneft, are also majority state-owned. Being majority-owned by the government can serve as either a drag on profitability or a boost. Perhaps nowhere is this more evident than with the big four Chinese banks. All four of these banks — Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China — were among the eight most profitable companies in the world. In order to determine the most profitable companies in the world, 24/7 Wall St. reviewed data on net Income before discontinued operations and extraordinary items, provided by FactSet. Data from FactSet is expressed in U.S. dollars, using the average annual exchange rate of local currencies against the dollar where applicable. However, different countries utilize different accounting standards, which can impact reported profits. Information on company countries, industries and revenue is from S&P Capital IQ and is for the most recent fiscal year.

Figures are translated by S&P Capital IQ using the effective exchange rate as of the end of each company’s fiscal year. Additionally, revenues cover only consolidated subsidiaries. Many large companies have unconsolidated affiliates and investments that meaningfully contribute to earnings. We have also provided currency translations in certain cases. Where this is the case, we used the exchange rate at the end of a company’s fiscal year. Further, we also elected to remove Fannie Mae and Freddie Mac from consideration, since both entities are currently under the conservatorship of the Federal Housing Finance Agency. All profits earned by the firms go to the U.S. Treasury Department. Australia’s banks the world’s most profitable | afr.com Australia’s banks the world’s most profitable Share Share on Reddit by Clancy Yeates Australia’s major banks are the most profitable in the developed world, the Bank for International Settlements says. Its figures highlight the big four’s consistently high returns as an inquiry investigates competition in the sector. The major banks’ pre-tax earnings as a share of their total assets rose to 1.28 per cent in 2013, higher than 10 other developed countries, the influential BIS said in its annual report on Sunday night.

It is the fourth consecutive year in which the sector’s profitability has been the highest among developed countries assessed by the BIS, including the United Kingdom, United States, Japan and various European nations. The comparison also showed the Commonwealth Bank ANZ have wider net interest margins and lower costs than most of their peers overseas. The US had the next most profitable banks, with earnings of 1.24 per cent of assets, followed by Canada at 1.06 per cent. The only nations with higher profitability on the annual list were the fast-growing emerging or BRIC economies – Brazil, Russia, India and China. Related Quotes View all announcements The BIS said lenders around the world were benefiting from improving profitability, and building up capital faster than expected as they recovered from the global financial crisis. But Australia’s stand-out profitability comes as the financial system inquiry being led by former Commonwealth Bank chief executive David Murray also examines the intensity of competition in the industry. Regional banks, consumer groups, credit unions and building societies are calling for changes to whittle down the big four’s advantages, especially in the $1.3 trillion mortgage market.

The chief executive of the Australian Bankers’ Association, Stephen Munchenberg, said the high profitability of the country’s banks reflected the relatively good shape of the economy, not a lack of competition. ‘‘We’ve got stronger economic growth and we’ve got lower unemployment than a lot of countries,’’ he said. ‘‘The banking industry believes that markets and bank products are ­competitive,’’ he said. Mr Munchenberg said ABA members – which include the regional banks – believed banking was competitive, but it supported Mr Murray looking at how to lift competition further. ‘‘If there are barriers to further competition, the inquiry should look at those being removed,’’ he said. Buoyed by very low bad debts, the Commonwealth Bank, Westpac, National Australia Bank and ANZ are tipped to make combined profits of $29.7 billion this year, according to Morningstar estimates. Mr Murray is due to deliver an interim report in mid-July, and senior Treasury official David Gruen last week said one issue on the agenda was the balance between promoting a competitive financial system and one that is stable.

Morningstar’s head of banking research, David Ellis, said he did not think Mr Murray’s report would recommend major changes that would upset the industry’s earning capacity. The high earnings were explained by falling bad debts and the big four’s strong market position, he said. ‘‘Bad debts have been falling since 2009, which has lifted profitability.’’ The BIS said Australian bank net interest margins – a gauge of banks’ cost of funds compared with what they are charging for loans – were 1.79 per cent of assets, behind Spain and the US among developed nations. Operating costs were 1.11 per cent of assets, the lowest after Sweden and Japan. With global interest rates at record lows, the BIS argued the key challenge facing central banks was returning borrowing costs to more normal levels. It warned that some emerging markets were experiencing financial booms that could lead to future busts, and said governments should adopt policies that lean “more deliberately and persistently against financial booms". The Australian Financial Review The 10 most profitable companies in the world The 10 most profitable companies in the world Alexander E.M. Hess & Thomas C.

Frohlich, 24/7 Wall St Yahoo7 Finance• View photos Already in its opening weekend, Apple (AAPL) sold 10 million iPhones, breaking its previous record. But despite massive sales of cutting-edge, high-margin electronics, Apple is not actually the most profitable company in the world. Based on data provided by FactSet on companies' net income before discontinued operations and extraordinary items for their latest fiscal year, these are the world’s 20 most profitable companies. Income from continuing operations - which excludes extraordinary and discontinued items from earnings - is an important indicator of the profitability of a company’s core business. By contrast, net income, the standard all-encompassing measure of profits, can include items that do not reflect underlying profitability of a business. For example, Vodafone (VOD) had $17.7 billion in net income from continuing operations, making it the 18th most profitable company in the world. However, this did not include the sale of its 45 per cent stake in Verizon Wireless to Verizon Communications. Had these figures been included, Vodafone would have been the most profitable company in the world. Of the 20 most profitable companies, nine are based in the United States.

These include two banks, Wells Fargo (WFC) and JPMorgan Chase (JPM); two energy companies, Exxon Mobil (XOM) and Chevron (CVX); and two technology giants, Apple and Microsoft (MSFT). Conglomerate Berkshire Hathaway (BRK-B) is also among the most profitable companies. In all, four industries account for the majority of companies among the world’s most profitable. Seven companies are in the energy industry, led by Gazprom and ExxonMobil, the most of any sector. Six of the most profitable companies are banks, with four based in China, and two based in the U.S. Three telecom giants - AT&T (NYSE: T), China Mobile (CHL), and Vodafone - are also among the 20 most profitable companies by normalised earnings. Finally, Apple joins Samsung Electronics and Microsoft to make up the technology companies on the list. Overall, six companies on this list are based in China. Each of these companies is majority-owned by the Chinese government. The two Russian companies among the 20 most profitable companies, Gazprom and Rosneft, are also majority state-owned. Being majority-owned by the government can serve as either a drag on profitability or a boost.

Perhaps nowhere is this more evident than with the big four Chinese banks. All four of these banks - Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China - were among the eight most profitable companies in the world. In order to determine the most profitable companies in the world, 24/7 Wall St. reviewed data on net Income before discontinued operations and extraordinary items, provided by FactSet. Data from FactSet is expressed in U.S. dollars, using the average annual exchange rate of local currencies against the dollar where applicable. However, different countries utilise different accounting standards, which can impact reported profits. Information on company countries, industries and revenue is from S&P Capital IQ and is for the most recent fiscal year. Figures are translated by S&P Capital IQ using the effective exchange rate as of the end of each company’s fiscal year. Additionally, revenues cover only consolidated subsidiaries. Many large companies have unconsolidated affiliates and investments that meaningfully contribute to earnings. We have also provided currency translations in certain cases. Where this is the case, we used the exchange rate at the end of a company’s fiscal year.

Further, we also elected to remove Fannie Mae and Freddie Mac from consideration, since both entities are currently under the conservatorship of the Federal Housing Finance Agency. All profits earned by the firms go to the U.S. Treasury Department. These are the 10 most profitable companies in the world. 10. Microsoft Corporation '''*Net income from cont. operations: $22.1 billion *Country: United States *Industry: Systems software *Revenue: $86.8 billion''' Microsoft has long been a giant in the technology industry, as well as one of its most profitable companies. The majority of Microsoft's operating income is derived from its commercial business segments, which licenses its products to businesses, including Office for Business, Windows operating system, and its server products. Related: More women in Microsoft's workforce Last year, across its consumer and commercial segments, Office, Windows, and server products and tools accounted for more than $58 billion of the company’s $86 billion in revenue. Going forward, however, investors are likely to look for growth from Microsoft’s phones and tablets, as well as from its cloud computing services. 9. BP *Net income from cont.

operations: $23.5 billion *Country: United Kingdom *Industry: Integrated oil and gas *Revenue: $379.6 billion BP was the third most profitable energy company in the world, with more than $23 billion in profits from continuing operations. Related: BP ruled grossly negligent in 2010 oil spill This was despite the fact that the Gulf of Mexico oil spill continued to weigh on its profitability. Charges associated with the spill lowered the bottom line by $396 million, although this was down from charges of almost $5 billion in 2012. Last year, BP also recorded a gain of $12.5 billion on the sale of its 50% stake in TNK-BP. Such gains are hardly one-time events for the company, which has recorded billions in gains from such sales in each of its last three fiscal years. In return for selling TNK-BP to Rosneft, BP also grew its stake in the Russian oil giant to nearly 20 per cent. Rosneft is also one of the most profitable companies in the world. 8. Bank of China Ltd. *Net income from cont.

operations: $25.5 billion *Country: China *Industry: Diversified banks *Revenue: $63.3 billion Bank of China traces its history back to 1912, when its founding was approved by the founding father of the Republic of China, Sun Yat-sen. The bank has had several roles throughout its history. Until 1949, it served as China’s central bank. Related: China data supports $A rise Thereafter, it managed the country’s foreign exchange operations. In 1994, it became a fully state-owned commercial bank, and in 2006, it offered shares on exchanges in both Hong Kong and Shanghai. The bank has grown to a massive size and reported net income from continuing operations exceeding $25.5 billion in 2013. At the end of last year, Bank of China was still more than two-thirds owned by the Chinese government through a state-owned enterprise. 7. Agricultural Bank of China Limited View photos *Net income from cont.

operations: $27.1 billion *Country: China *Industry: Diversified banks *Revenue: $68.2 billion The Agricultural Bank of China is one of the big four Chinese banks, all of which are among the eight most profitable companies in the world. Until the recent public offering by e-commerce giant Alibaba, ABC held the record for largest IPO in history, after raising more than $19 billion in 2010. Stock information: Agricultural Bank of China ABC and its cohorts have benefited from China’s move in the 1990s to establish a number of asset management companies, which buy bad loans from the Chinese banking system. However, after the most recent surge in Chinese lending, which was directed by the country’s government, worries have arisen that the Chinese financial system may be loaded with bad debt. 6. Samsung Electronics Co., Ltd. View photos Industry: Technology hardware, storage and peripherals > Revenue: $216.6 billion Samsung is, by far, the most profitable company in South Korea, with more than $27 billion in income from continuing operations last year. Although its smartphone market share declined in the last year, Samsung is still the largest smartphone maker in the world.

Sales of Samsung smartphones accounted for 25 per cent of the global market as of the second quarter of 2014, according to IDC. Related: Samsung’s new technology a game changer for downloads In the first half of this year, the company’s information technology and mobile communications segment - which includes Samsung’s phones - accounted for 57.4 per cent of the company’s sales. Of course, Samsung Electronics makes far more than just phones. It also makes monitors, digital cameras, washing machines, and more. Samsung Electronics is one of many companies bearing the Samsung name and is considered part of the Samsung Group: a network of companies, called a chaebol in South Korea, with complex cross-holdings between member firms. 5. Exxon Mobil Corporation *Net income from cont. operations: $32.6 billion *Country: United States *Industry: Integrated oil and gas *Revenue: $393.7 billion ExxonMobil is the second largest company in the United States by income from continuing operations, trailing only Apple. It is also one of the largest companies in the world by market capitalisation. The company’s upstream segment which explores for and produces oil, accounted for the bulk of its earnings last year.

Related: ExxonMobil announced new projects ExxonMobil derived nearly $26 billion in income from its production activities last year, of which just under half came from equity affiliates - investments whose revenue and costs are not directly included in the income statement. In addition to its highly profitable upstream segment, ExxonMobil notes that it is “the world’s largest refiner and marketer of petroleum products,” and that “our chemical company ranks among the world’s largest.” While low oil prices may hurt the company’s upstream segment, they could also potentially improve margins in its refining business. 4. China Construction Bank Corporation View photos *Net income from cont. operations: $34.9 billion *Country: China *Industry: Diversified banks *Revenue: $76.9 billion China Construction Bank is one of four Chinese banks among the eight most profitable companies in the world. Last year, the company reported more than 214 billion yuan in profits, or roughly $35 billion. Stock information: China Construction Bank Helping the bank generate such huge profits, China Construction Bank reported nearly 400 billion yuan in net interest income, or more than $64 billion. In addition to posting larger profits than its U.S.

counterparts, the bank also had a return on equity of 21.2 per cent, well above the 13.9 per cent figure for Wells Fargo, America’s most profitable bank. Like other major Chinese banks, China Construction Bank is majority state-owned. 3. Gazprom OAO. *Net income from cont. operations: $35.7 billion *Country: Russia *Industry: Integrated oil and gas *Revenue: $156.6 billion Along with Rosneft, Gazprom is one of two of the world’s 20 most profitable companies based in Russia. Like Rosneft, Gazprom is majority-owned by the Russian government, with government-controlled entities holding just over half of all shares. Related: Gazprom to store natural gas in Hungary Gazprom claims to own the largest reserves of natural gas in the world and to account for 13 per cent of global natural gas production. Gazprom also notes that its natural gas transmission network is the largest in the world, with roughly 168,900 kilometers of pipelines. The company is a massive exporter of gas throughout Europe.

However, because of this, it is often viewed as a tool of Russian foreign policy in Europe, including in Ukraine. 2. Apple Inc. *Net income from cont. operations: $37.0 billion *Country: United States *Industry: Technology hardware, storage and peripherals *Revenue: $170.9 billion Apple may have posted the most extraordinary growth in net income among any of the most profitable companies in the world. In 2004, Apple made $276 million. Last year, that number rose to $37 billion. The company’s recent growth has been fueled in large part by the iPhone. Last quarter, Apple sold more than 35.2 million iPhones, which produced $19.8 billion of the company’s total revenue of $37.4 billion in the period. Related: Drooling investors circle Apple At least near term, the iPhone will likely remain the key to Apple’s growth. The company sold 10 million units of the new iPhone 6 and iPhone 6 Plus in the first weekend they were available. The phones will be available in 69 countries and territories by the end of October.

Because of its size, the most important of these markets is likely China, where newest iPhones will be available from all three of the country’s largest wireless carriers. 1. Industrial and Commercial Bank of China Limited View photos *Net income from cont. operations: $42.7 billion *Country: China *Industry: Diversified banks *Revenue: $89.4 billion The Industrial and Commercial Bank of China is the world’s most profitable company, with a net income from continuing operations of more than $42.7 billion last year. However, the profitability of the bank is somewhat dependent on government policy. Notably, in 2010, ICBC marketed a trust product, called "2010 China Credit / Credit Equals Gold #1." The product was not explicitly guaranteed by the bank. Stock information: ICBC However, after considerable government pressure, the company lent money to an asset manager to bail out customers from the product. Concerns about such shadow financing have been building in China for a long time. While ICBC is massive, with continued growth in assets, it has substantial exposure to such potentially risky products. These products, under certain scenarios, could weigh heavily on profits in the future.

More from 24/7 Wall St: The World's Biggest Companies The World's Biggest Companies Opinions expressed by Forbes Contributors are their own. Full Bio The author is a Forbes contributor. The opinions expressed are those of the writer. Loading ... Loading ... This story appears in the {{article.article.magazine.pretty_date}} issue of {{article.article.magazine.pubName}}. Subscribe One world: one gigantic market place. This year, 63 countries have Global 2000 entries vs 51 in our inaugural list in 2004. Forbes Global 2000 are the biggest, most powerful listed companies in the world. Our justification for using a composite ranking is simple: One metric alone can give a false impression about corporate size. Our ranking of the world's biggest companies departs from lopsided lists based on a single metric, like sales. Instead we use an equal weighting of sales, profits, assets and market value to rank companies according to size.

26 images In total, the Global 2000 companies now account for $38 trillion in revenues (up 6%), $2.43 trillion in profits (down 7%), $159 trillion in assets (up 7%) and $39 trillion in market value (up 7%). These firms also employ 87 million people worldwide. All metrics are up from a year ago, except for profits. Full List: The Global 2000 This year’s list again reveals the dynamism of global business. The rankings span 63 countries, three countries less than last year. The U.S. (543 members) adds 19 firms, bucking its declining presence since 2004 and registering its highest total since 2009. Japan (251 members) again has the second biggest presence on our list despite losing seven more members from last year. Mainland China (136 members) checks in as the third largest country in terms of membership with same number of firms from a year ago. This is the first year since our inaugural 2004 list that China has not increased its number of Global 2000 companies.

There are eleven countries with only one firm, including New Zealand, the Czech Republic and Vietnam. Countries standing out in terms of growth across all four metrics are Singapore, Thailand and Malaysia. Belgium, Turkey, and the United Arab Emirates saw the biggest increase in company market values, all with double-digit growth from a year ago. The current economic crisis in Spain and Greece took its toll on their firms' profits with each showing a country showing a combined deficit this year. You can also throw Italy in the mix as their firms show a decline in all four metrics this year. In our tenth annual ranking, government-controlled Chinese bank ICBC unseats Exxon Mobil as the world’s biggest company this year and takes the number one spot for the first time. Another Chinese bank, China Construction Bank , moves up 11 spots to No. 2 on the list. Each company's bump up in our ranks stem from double-digit growth in both sales and profits in 2012. Although profits are still growing for both banks, 2012 was their slowest annual growth rate since each went public. Most analysts don’t expect a banking crisis in China, but rising defaults and shrinking loan profitability are serious threats to the country’s banking system.

JPMorgan Chase , the world's biggest company in 2011, moves down one spot from last year to No. 3, with a small decline in sales. Also moving down a spot this year is conglomerate GE , the No.4 company overall. Rounding out the top five is last year's biggest company, Exxon Mobil . Despite being the world's most profitable company for the second year in a row, the oil & gas giant was knocked off its No.1 perch after a one-year reign. Apple (tied at No. 15) is again the world's most valuable company, even after it took a 24% haircut in market value since last March. Wal-Mart Stores (tied at No.15) returns as the word's sales leader with 5% growth, reclaiming the top spot from Royal Dutch Shell . Germany's Allianz , Korea's Samsung Electronics , and U.S.based AT&T broke into the elite 25 this year, with Allianz gaining the most ground, up from No. 50 a year ago to No. 25.

If you are looking for big jumps in rank on this year's list, you can start with German utility firm E.ON (No.99 vs. No. 409 in 2012), which returned to profitability in 2012 assisted by several factors, including the successful renegotiation of gas-supply contracts from Russia and Norway, a lack of previous negative one-off effects and Germany's decision to phase out nuclear power. U.S.-based health care company, Express Scripts (No.170 vs. No.381 in 2012) jumped 211 spots with its $29.1 billion acquisition of rival Medco Health Solutions. Japanese beverage company Kirin Holdings (No. 467, vs. No. 733 in 2012) saw a big increase in profits and a 31% gain in market value. Looking at big drops in rank, these firms are showing declines in all four metrics from a year ago. There is U.S.-based PC giant Hewlett Packard (No. 438, vs. No. 67 in 2012), which wrote down $8.8 billion of the value of U.K.

software firm Autonomy, a year after its disastrous $11.1 billion acquisition. Mining giant Rio Tinto (No. 435, vs.m No. 69 in 2012) recorded a net loss after impairments of $14 billion, primarily relating to aluminum businesses as well as coal assets in Mozambique. Another company's fall from grace is Brazil's energy giant, Eletrobrás (No. 935, vs. No. 320 in 2012), posted a net loss in 2012, due to the impacts of a government order to cut energy electric rates. There are 162 newcomers to this year's Global 2000. The biggest newcomers immediately land on the list by way of initial public offerings or spin-offs of major subsidiaries of their former parent companies, who are also on our list. Phillips 66 (No. 130), was spun-off from ConocoPhillips (no. 73) in May of last year. AbbVie (No. 257) is the research-based pharmaceuticals business of Abbott Labs (No.

123) that started to publicly trade as an independent company in January of this year when the company officially separated into two public companies. At press time, Abbott Labs did not release 2012 historical figures as a new stand-alone company, so its sales, profit and asset figures and ranks are based on consolidated figures prior to the separation. Kraft Foods Group (No. 360), the North American grocery business was spun-off in October of last year by Mondelez International (No. 182). Chinese insurer People's Insurance Company of China (PICC- No. 226) went public in a $3.1 billion November 2012 IPO. German insurance firm, Talanx , the majority owner of Hannover Re, pulled its IPO plans in mid-September 2012, but then went ahead with a $602 million IPO in October 2012. Banks and diversified financials still dominate the list, with a combined 469 (down 9 from last year) companies, thanks in large measure to their sales and asset totals.

The next three biggest industries by membership are oil & gas (124 firms), materials (122 firms) and insurance (109 firms). The industry growth leaders over the past year for each metric: health care companies, primarily services, lead all sectors in sales (up 15%); household products and services lead in profits (up 22%); Semiconductors lead in asset growth (up 24%); and media, getting a big boost by broadcasting and cable companies, lead all sectors in market value growth (up 20%). The materials sector, including metal and mining companies, lagged all industries with a 55% drop in profits and 19% decline in market value. We break our list into four regions: Asia-Pacific, (715 total members), followed by Europe, Middle East & Africa-EMEA (606), the U.S. (543) and the Americas (143). Only the U.S. grew across all four metrics from a year ago. Asia-Pacific, the biggest region, has the most members for the sixth year running.

They also lead all regions in sales growth (up 8%) and asset growth (up 15%) . The U.S. leads in profit growth (up 4%), earning an aggregate $876 billion in profits and market value growth (11%), with an aggregate value of $14.8 trillion. U.S.-based companies are the most profitable and most valuable of all regions. The EMEA generated the most sales, a combined $13.3 trillion, and holds the most assets with $64 trillion. World’s Most Profitable Banks in Indonesia Double U.S. - Bloomberg Bloomberg the Company & Its Products Bloomberg Anywhere Remote LoginBloomberg Anywhere Login Bloomberg Terminal Demo Request Bloomberg Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Customer Support Advertising Bloomberg Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Customer Support World’s Most Profitable Banks in Indonesia Double U.S.

Sanat Vallikappen and Berni Moestafa The lime-green Yamaha Mio motorbike that Suryadi bought in 2011 to commute to his job pumping gas in Jakarta would have cost 11.8 million rupiah ($1,221) had he purchased it outright. Instead he took out a loan at 16 percent. Now the 44-year-old father of three is making monthly payments to PT Bank Danamon Indonesia that eat up about one-fifth of his salary. He’ll end up paying 46 percent more than the cost of the bike by the time he retires the loan. “I don’t have the money to pay in cash,” said Suryadi, who like many Indonesians goes by one name. “Paying in installments is all I can afford.” Borrowers like Suryadi have helped make Indonesian lenders the most profitable among the 20 biggest economies in the world, according to data compiled by Bloomberg. The average return on equity, a measure of how well shareholder money is reinvested, is 23 percent for the country’s five banks with a market value more than $5 billion, the data show.

That’s greater than Chinese banks of the same size, which have an average return of 21 percent, and Canadian firms with 20 percent. It’s more than double the 9 percent in the U.S. Profitability might have been even higher if Indonesia’s lenders weren’t also among the most inefficient, as measured by the ratio of operating expenses to total assets. Interest Margins Returns in Indonesia, Southeast Asia’s largest economy, are driven by net interest margins, the difference between what banks charge for loans -- an average of 12 percent, according to the central bank -- and what they pay for deposits. The average margin for the country’s big banks is 7 percentage points, the highest of the 20 economies, according to the latest available data compiled by Bloomberg. “It’s a basic supply-and-demand equation,” said Ken Timsit, a Jakarta-based partner and managing director at Boston Consulting Group , which has studied the profitability of banks worldwide. “There’s plenty of demand for credit, but limited supply,” making it lucrative for banks to lend.

The profitability of lenders including PT Bank Rakyat Indonesia, whose 34 percent return on equity is the highest, and PT Bank Central Asia, the largest by market value, contrasts with that of Western counterparts such as Deutsche Bank AG, Barclays Plc and UBS AG, which have lowered targets as they reduce risk-weighted assets to meet higher capital requirements. Global banking return on equity fell to 7.6 percent in 2011 from 8.4 percent a year earlier, below the 10 percent to 12 percent average cost of equity, McKinsey & Co. wrote in an October report . U.S. banks had an average return on equity of 7 percent in 2011, while European lenders earned zero -- or 5 percent excluding the most indebted nations such as Spain and Greece -- according to the study. Takeover Target Indonesia’s high net interest margins have prompted banks such as DBS Group Holdings Ltd. in Singapore, where the figure averages 2 percent, to look at acquisitions. DBS, Southeast Asia’s biggest lender, made a $6.8 billion bid in April for 99 percent of Bank Danamon and is awaiting regulatory clearance.

At odds with the profitability of Indonesia’s banks is their inefficiency. The ratio of operating expenses to assets, a measure of the cost of providing services, ranges from 2.5 percent to 4 percent at the country’s biggest lenders, according to Boston Consulting Group’s Timsit. It’s 2 percent in Malaysia and 1 percent in Singapore, he said. The higher expenses are largely a function of Indonesia’s geography, said Alexander Chia, a Kuala Lumpur-based analyst at RHB Capital Bhd. With 17,508 islands, 6,000 of them inhabited, and with more than two-thirds of the country’s 242 million people living in rural areas, it costs more to operate and staff a branch network, he said. ‘Not Efficient’ “Indonesian banks’ efficiency is still lacking compared with other countries,” said Robby Hafil, an analyst at PT Trimegah Securities in Jakarta. “Our banks are trying to cover operational costs by increasing net interest margin, and as long as operations remain inefficient this practice will continue.” Indonesia’s banking regulator agrees that the system isn’t efficient and relies on high interest rates for profits.

“They want to give a higher lending rate because the cost of providing banking is too large, because they are not efficient right now,” Hartadi Sarwono, a deputy governor of Bank Indonesia, the country’s central bank, said in an interview in November. “If they reduce the cost, then they can reduce the lending rate, and not necessarily reduce profits.” Inflation Rate Indonesia’s history of inflation, averaging 7.3 percent in the past 10 years, has kept benchmark interest rates for the past year at 5.75 percent, one of the highest among major economies, data compiled by Bloomberg show. The country’s benchmark rate, as high as 12.75 percent in April 2006, is lower only than Russia’s 8.25 percent, India’s 7.75 percent, Brazil’s 7.25 percent and China’s 6 percent. “For consumers, the interest rates still feel low given that Bank Indonesia’s benchmark interest rate is at a record low,” said Isfhan Helmy, a Jakarta-based banking analyst at PT Sucorinvest Central Gani.

The lower benchmark rate, along with a March 2011 central bank rule requiring banks to keep loan-to-deposit ratios above 78 percent, has helped spur lending. Halim Alamsyah, another Bank Indonesia deputy governor, said in Jakarta Jan. 10 he expects loans to increase 23 percent this year. Consumer Loans Much of the gain has come in retail and consumer loans, which are more profitable than those to companies, said Pahala Mansury, director of finance at PT Bank Mandiri, which is 60 percent owned by the government and Indonesia’s second-largest lender by market value. Bank Mandiri’s microlending, consumer and small-business units accounted for about 30 percent of total loans at the end of September compared with 25 percent three years earlier, according to company filings. The segment contributes 50 percent of the lender’s revenues now and may account for 40 percent of its loan portfolio by 2014, Mansury said. Bank Central Asia increased its consumer loans by almost 50 percent in the quarter ended Sept. 30 from a year earlier.

It accounts for 27.5 percent of the lender’s total loans compared with 25 percent a year earlier. Nonperforming loans, at record lows of 2 percent for Indonesia’s banks, could increase this year as a result of the rapid rise in lending, according to a Nov. 19 Fitch Ratings report. Banks will be able to sustain profitability because they’re making adequate provisions to cover losses, Fitch said. The top five banks by market value account for almost half the loans in Indonesia’s banking system. Bank Danamon, which has a unit dedicated to vehicle loans that caters to borrowers like Suryadi, had the highest net interest margin at 9.84 percent, according to data compiled by Bloomberg. It was followed by state-controlled Bank Rakyat with a margin of 8.37 percent. Bank Profits Rakyat’s 2012 profit rose 23 percent from a year earlier to 18.5 trillion rupiah, the highest on record since 2000, it said in a statement on Jan. 31. The profit growth is the result of the bank strengthening its focus on microlending, it said.

Citigroup Inc., the second-largest Western bank in Indonesia with 22 branches in six cities, has a net interest margin in the country of 4 percent, according to Tigor Siahaan, chief country officer for the New York-based company. About 65 percent of profits come from business dealings with large companies, which explains thinner margins than some of the local lenders that focus on consumers, Siahaan said. The lender was banned in May 2011 by Bank Indonesia from adding new wealth-management clients for one year and new credit-card clients for two years after an employee was accused of stealing $5 million from her clients and a customer died at a branch following meetings with Citigroup debt collectors. The bank said it would return the stolen money to customers. An internal investigation into the death didn’t reveal any physical violence, the company said. Loan Ratios As profitable as lending in Indonesia is, banks have made loans to only 28 percent of the population, or about 67 million people, according to World Bank data. Loans outstanding at the country’s 120 commercial lenders totaled $272 billion at the end of November, according to central bank data.

That’s about 30 percent of 2011’s gross domestic product, the lowest loans-to-GDP ratio among major Asian markets, said Stephan Hasjim, a Jakarta-based analyst at Nomura Holdings Inc. Neighboring Singapore and Malaysia have loans-to-GDP ratios of 150 percent and 125 percent respectively, according to data compiled by Bloomberg, based on cumulative loans outstanding at the end of the most recent month for which data is available and 2011 GDP figures. Economic expansion in Indonesia, the world’s 16th-largest economy, will average 6.4 percent from 2013 to 2017, the Organization for Economic Cooperation and Development estimated in a Nov. 18 report . Its GDP was $846 billion in 2011, according to International Monetary Fund data. ‘Serious Issue’ The 20 Most Profitable Companies in the World The 20 Most Profitable Companies in the World Alexander E.M. Hess and Thomas C. Frohlich Storm clouds form near a BP station in Alexandria, Virginia July 19, 2010.

REUTERS/Molly Riley More With the recent release of the iPhone 6 and iPhone 6 Plus, Apple is again the focus of the financial world. Already in its opening weekend, Apple ( AAPL ) sold 10 million iPhones, breaking its previous record. With massive sales of cutting-edge, high-margin electronics, Apple is now the second most profitable company in the world. The only company with a higher profit is the Industrial and Commercial Bank of China. Based on data provided by FactSet on companies' net income before discontinued operations and extraordinary items for their latest fiscal year, these are the world’s 20 most profitable companies. ALSO READ: America's Best Companies to Work For Income from continuing operations -- which excludes extraordinary and discontinued items from earnings -- is an important indicator of the profitability of a company’s core business. By contrast, net income, the standard all-encompassing measure of profits, can include items that do not reflect underlying profitability of a business. For example, Vodafone ( VOD ) had $17.7 billion in net income from continuing operations, making it the 18th most profitable company in the world. However, this did not include the sale of its 45% stake in Verizon Wireless to Verizon Communications.

Had these figures been included, Vodafone would have been the most profitable company in the world. Of the 20 most profitable companies, nine are based in the United States. These include two banks, Wells Fargo ( WFC ) and JPMorgan Chase ( JPM ); two energy companies, Exxon Mobil ( XOM ) and Chevron ( CVX ); and two technology giants, Apple and Microsoft ( MSFT ). Conglomerate Berkshire Hathaway ( BRK-B ) is also among the most profitable companies. In all, four industries account for the majority of companies among the world’s most profitable. Seven companies are in the energy industry, led by Gazprom and ExxonMobil, the most of any sector. Six of the most profitable companies are banks, with four based in China, and two based in the U.S. Three telecom giants -- AT&T (NYSE: T), China Mobile ( CHL ), and Vodafone -- are also among the 20 most profitable companies by normalized earnings. Finally, Apple joins Samsung Electronics and Microsoft to make up the technology companies on the list. Overall, six companies on this list are based in China. Each of these companies is majority-owned by the Chinese government.

The two Russian companies among the 20 most profitable companies, Gazprom and Rosneft, are also majority state-owned. Being majority-owned by the government can serve as either a drag on profitability or a boost. Perhaps nowhere is this more evident than with the big four Chinese banks. All four of these banks -- Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China -- were among the eight most profitable companies in the world. In order to determine the most profitable companies in the world, 24/7 Wall St. reviewed data on net Income before discontinued operations and extraordinary items, provided by FactSet. Data from FactSet is expressed in U.S. dollars, using the average annual exchange rate of local currencies against the dollar where applicable. However, different countries utilize different accounting standards, which can impact reported profits. Information on company countries, industries and revenue is from S&P Capital IQ and is for the most recent fiscal year. Figures are translated by S&P Capital IQ using the effective exchange rate as of the end of each company’s fiscal year. Additionally, revenues cover only consolidated subsidiaries. Many large companies have unconsolidated affiliates and investments that meaningfully contribute to earnings.

ALSO READ: 10 States With the Best Quality of Life We have also provided currency translations in certain cases. Where this is the case, we used the exchange rate at the end of a company’s fiscal year. Further, we also elected to remove Fannie Mae and Freddie Mac from consideration, since both entities are currently under the conservatorship of the Federal Housing Finance Agency. All profits earned by the firms go to the U.S. Treasury Department. These are the 20 most profitable companies in the world. 1. Industrial and Commercial Bank of China Limited > Net income from cont. operations: $42.7 billion > Country: China > Revenue: $89.4 billion Read More The Industrial and Commercial Bank of China is the world’s most profitable company, with a net income from continuing operations of more than $42.7 billion last year. However, the profitability of the bank is somewhat dependent on government policy. Notably, in 2010, ICBC marketed a trust product, called "2010 China Credit / Credit Equals Gold #1." The product was not explicitly guaranteed by the bank.

However, after considerable government pressure, the company lent money to an asset manager to bail out customers from the product. Concerns about such shadow financing have been building in China for a long time. While ICBC is massive, with continued growth in assets, it has substantial exposure to such potentially risky products. These products, under certain scenarios, could weigh heavily on profits in the future.

Question: As at 2013 what country boasted the four most profitable banks in the world?
Answer: China