Wells Fargo & Co (NYSE:WFC) dethrones ICBC from top spot
In China, The Industrial & Commercial Bank of China harbors a great deal of clout. It stands tall as a symbol of the financial prowess of the country. And surprisingly, data showed that by market capitalization, Wells Fargo & Co (NYSE:WFC) has deposed it as the largest bank in the world. The year 2007 saw the ICBC’s reign take off as the largest bank in the world. In November of the same year, its value peaked at $374B, primarily due to the rapid economic expansion in China. The bank managed to hold this position for 6 long years.
However, this week, the New York Stock Exchange announced that Wells Fargo & Co (NYSE:WFC) of the U.S is now worth $236B. On the other hand, Chinese figures indicate that the Industrial & Commercial Bank of China’s value has dropped to almost $223B. The economic recovery post the crises also resulted in a rebound in the real-estate sector. This is what supported the WFC recovery.
The San Francisco bank took over the top position on 12 July and has held onto it since. The bank is the United States’ biggest retail-mortgage lender. It has 270,000 employees working at 9,000 branches across the world. China is the 2nd largest economy in the world and this shift has come at a time when it has been losing a lot of steam.
Risky Chinese banking system
In the April-June period, there was a 7.5% y-o-y expansion in China’s GDP which has slowed down from the 7.7% that it stood at, over the last 3 months. Last month, a liquidity crunch managed to expose various risks related to the banking system in China. This was when there was a shortage of funds on the country’s Interbank market. This led to an increase in the interest rates that banks charge each other while lending funds. Overall, all these developments have seemed to work in WFC’s favor and the bank is thriving.