Four large Brazilian banks appear in the list of the ten most profitable on the planet, according to a survey by the financial data analysis company Economatica.
The ranking was based on the percentage of ROE, an acronym for return on equity. This indicator is used to measure how much a company can gain in value using its own resources.
American bank Capital One leads the list, with a return of 20.4%, followed by fellow American Ally Financial, with 19.3%.
Best placed among Brazilians, the national branch of Spanish Santander is in third position, with a ROE of 18.9%.
Santander Brasil also presented the best ROE among large Brazilian banks for the fourth year in a row, but lost the global leadership it held until last year.
In fifth position, with a return of 17.3%, Itaú Unibanco appears ahead of the American giant JP Morgan. With a ROE of 16.9%, the largest US bank has US$3.7 trillion in assets. Itaú has US$ 388 billion.
Following are Banco do Brasil and Bradesco, with 15.7% and 15.2%, respectively.
The basis used by Economatica was the return on average equity for the fiscal year ending December 2021, considering the 39 publicly traded banks with assets above US$100 billion.
The United States has the most large banks on this list, with 19 in total.
Brazil, Canada and Great Britain appear with four banks each. Japan and South Korea have three banks. Spain and India have two banks each. Another four countries have an institution in this ranking.
Economatica also evaluated the performance of 8 of the top 10 banks that appear in surveys conducted since 2010. Royal Bank of Canada and Bank of Nova Scotia were excluded because they did not show ROE before 2013.
Three of the great white Brazilians –Banco do Brasil, Itaú and Bradesco– had a significant decline between 2010 and 2021. During this same period, Santander made consistent progress.
Banco do Brasil’s return on equity dropped from 27% to 15.7%. Itaú’s fell from 24% to 17.3%. At Bradesco, the drop was from 22.3% to 15.2%.
Santander, on the other hand, saw its profitability rise from 6% to 18.9% in this interval.
With the inversion of these curves, Itaú, BB and Bradesco lost their hegemony in the first three places, which lasted from 2010 to 2017.
In 2016, Santander’s ROE was 9.7%. Since then, the number has grown steadily, having dropped only once, in 2020, when it lost 3.1 percentage points compared to the result presented in 2019.
The median profitability of the four large Brazilian banks presented is 16.5%, a drop of 6.6 percentage points compared to 2010.
The value is higher than the historical median of the 19 US banks present in the ranking, which over the years varies between 8% and 11%.
“The median profitability of large Brazilian banks has always been higher than that of large banks traded in the United States, according to data from the analyzed period. Although the distance has decreased, Brazilians are still more profitable in the median”, says the report.
The difference between the median profitability of large banks in relation to other banks in Brazil showed a difference of 8.3 percentage points in 2010. In 2021, there is a difference of 4 percentage points.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
