Buffett’s Wells Fargo deposes China’s ICBC as world’s biggest bank

Wells Fargo deposes China’s ICBC as world’s biggest bank

POSTED: 24 Jul 2013 1:47 PM
The Industrial & Commercial Bank of China (ICBC) has lost its standing as the world’s largest bank by market capitalisation to US-based Wells Fargo, data showed Wednesday, as China’s economy slows.

SHANGHAI: The Industrial & Commercial Bank of China (ICBC) has lost its standing as the world’s largest bank by market capitalisation to US-based Wells Fargo, data showed Wednesday, as China’s economy slows. San Francisco-based Wells Fargo & Co is worth $236 billion, according to the New York Stock Exchange, where it is listed, while Chinese figures show ICBC is now valued at $223 billion.ICBC’s six-year reign as the world’s biggest bank began in July 2007, and its value peaked at $374 billion in November that year thanks to China’s rapid economic expansion, and stood as a symbol of the country’s emergence as a global powerhouse.

But it was deposed on July 12 and Wells Fargo has retained top spot since.

The shift comes at a time when the world’s second largest economy is losing steam, and a liquidity crunch last month exposed risks in the banking system, sending financial stocks into a tailspin.

China’s economy expanded 7.5 percent year-on-year in the April-June period, slowing from 7.7 percent in the previous three months.

In June, a shortage of funds on China’s interbank market sent the interest rates banks charge to lend to each other to record highs, raising worries over the health of the financial sector.

China last week announced a long-awaited interest rate liberalisation, removing a floor on banks’ lending rates, but the move sparked worries that narrower interest margins could erode earnings.

As of midday Wednesday, ICBC was down 0.51 percent at 3.91 yuan in Shanghai and 0.20 percent lower at HK$5.09 in Hong Kong.

Wells Fargo closed down 0.13 percent at $44.57 on Tuesday.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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