Prudence—or stricter regulations—has left European players in enviable shape
Chairman: Stephen Green
Market Value: $192 billion
It's not usually a mark of distinction when a company's stock falls 3.5% in a year. But in these nasty times, that performance has propelled HSBC (HBC) to the top of the banking industry. HSBC's girth has helped it endure the credit crunch. Equally important is its huge presence in Asia, which accounted for two-thirds of the bank's $10.2 billion in profit in the first half. Although U.S. operations could be a drag on earnings, HSBC has moved swiftly to fix the subprime problems in its mortgage portfolio.
Despite the bank's sprawl, Chairman Green is sharpening his strategy. This year he sold off retail banks in France, which didn't fit in the HSBC global network. And in a bet that emerging markets will outpace developed ones, Green is building on HSBC's Hong Kong roots with further investments in Asia.
Chairman: Emilio Botín
Market Value: $96 billion
With no exposure to U.S. subprime assets and $71 billion in spare capital, Spain's Banco Santander (STD) is able to sift through the wreckage in global finance. The firm, which focuses largely on retail banking, gobbled up Britain's Alliance & Leicester for $2.3 billion on Sept. 22 and may be looking at troubled U.S. lender Washington Mutual (WM).
Since 1986, when Emilio Botín took over as president from his father, Santander has been on a global push. Last year, Botín bought Brazil's Banco Real for $17.2 billion, making Santander Latin America's No. 1 financial player. But Santander hasn't entirely escaped the housing mess. Defaults have almost doubled in the past year because of slumping Spanish and British real estate markets, which account for some 75% of its loan portfolio.
President: Robert Diamond Jr.
Market Value: $53 billion
Over the past decade, London's Barclays (BCS) has grown faster than most European rivals thanks to its investment banking wing, Barclays Capital. San Francisco-based Barclays Global Investors, an asset manager with a quantitative approach, has also been a big hit. Now, Barclays is buying the core of Lehman Brothers' U.S. business—including the failed bank's 32-story Manhattan headquarters—for $1.75 billion.
Overseeing the Lehman deal and the key investment banking and asset management units is Bob Diamond, a Massachusetts native and diehard Red Sox fan. While Diamond has been instrumental to Barclays' success, he has stumbled lately. His businesses are responsible for most of the $6.7 billion in writedowns Barclays has taken in the past two years.
Chairman: Josef Ackermann
Market Value: $43 billion
Since 2002, when Ackermann became Deutsche Bank's (DB) first non-German CEO, the Swiss native has helped revive Germany's largest bank. Deutsche has made acquisitions in emerging markets and has become the global leader in currency trading. With new dealmaking expertise, it has gotten stronger in investment banking, and as its rivals suffer, Deutsche is profiting from a reputation for prudent management.
Deutsche hasn't dodged the financial crisis. It has written off $10 billion since mid-2007, but that's a relatively modest 20% of shareholder equity. Now, with investment banking under attack worldwide, Ackermann has renewed Deutsche's focus on Germany. On Sept. 12 it agreed to pay $4 billion for 30% of Postbank, which offers retail banking from German post offices.