Citigroup Inc. was the world's biggest banking company last year, exceeding Deutsche Bank AG in assets by about $30 billion, according to data prepared for American Banker by a sister company, Thomson Financial/Worldscope.
Meanwhile, Bank of America Corp., which for years was one of the nation's most acquisitive banking companies, dropped to the eighth spot from No. 5. That change largely reflects its chief executive's pledge to swear off new bank deals at least for the foreseeable future and concentrate on getting the Charlotte, N.C., company's house in order.
Citigroup leapfrogged Deutsche Bank - which was No. 1 in 1999 - by increasing its assets at a rate of 25%. Deutsche, some of whose acquisition plans have come to naught lately, had asset growth of only about 5%.
Worldscope's information is based on company reports and includes only assets from mergers closed before Dec. 31, 2000.
Among the top 10, three were U.S. companies; besides the No. 1 Citi and the No. 8 Bank of America, J.P. Morgan Chase & Co. took fourth place.
Two of the top 10 were Japanese and the remainder European. Because the data presented are for 2000, they do not reflect the emergence of a Japanese banking giant of a size on a par with Deutsche and Citi. In April three banks combined as Sumitomo-Mitsui Banking Corp.
The rise of J.P. Morgan Chase & Co. to No. 4 was certainly no surprise. When the company was established late last year by the marriage between the old blue chip Wall Street bank, J.P. Morgan & Co., and Chase Manhattan Corp. it had assets of $715 billion, according to Worldscope. The previous year, Chase Manhattan was in 20th position, while J.P. Morgan languished at No. 36.
Few other American companies made the list's upper reaches. In fact the next U.S. banking company outside the top 10 was San Francisco's Wells Fargo & Co., which sat at No. 28. It was followed in successive order by Bank One Corp. in Chicago and First Union Corp. of Charlotte.
Analysts who cover the major U.S. banks say the findings hardly come as a shock.
There has been a lot of consolidation among U.S.-based banking institutions, but it has slowed somewhat - particularly since 1998, when size-obsessed bank executives helped fuel a frenzy that saw deals announced every few days. Those banks still looking to do deals tend to be more focused on the domestic market and are not necessarily looking to make global plays, according to observers.
Citigroup and J.P. Morgan are perhaps the only two U.S. banking companies that are clearly focused on being truly global players.
The Chase-Morgan merger gave Chase more access to investment banking in Europe, which was part of that transaction's rationale, said Matt Snowling, an equity analyst with Friedman Billings Ramsey & Co.
Nonetheless, Mr. Snowling said, "I don't think the main reason for that deal was to get bigger - it was to have the right products."
Citigroup, for its part, cemented its bid for global reach with the recently announced $12.5 billion deal for Mexican banking company Banacci, the second-biggest bank south of the border. That deal is not included in the current Worldscope global rankings.
Citigroup, which at the end of the first quarter had actually boosted the assets listed on its balance sheet to $940 billion, is probably even larger, said Diana Yates, an equity analyst with A.G. Edwards & Sons.
Ms. Yates estimates that the New York bank's true asset size could be more than $1 trillion. "They've been moving assets off their balance sheet, mainly through securitization," said the analyst, who estimates that Citigroup may have moved as much as $100 billion recently.
Despite the size of Citigroup and J.P. Morgan Chase & Co., and the pace of consolidation that has helped mold those banks, the United States is still far behind the rapid merger pace of banking markets in Europe and Japan, Ms. Yates said.
"They've been more consolidated than the U.S. banks," she said. "You've got three banks in Switzerland. Citigroup may be big, but it's in a market where there are 7,500 bank charters."
