Western banking giants are losing ground to China, as the world's second-biggest economy vies to establish its economic influence.
Three of the top five banks in the world are now Chinese, according to financial intelligence provider The Banker, which published a list on Monday rating 1,000 institutions by capital strength. It ranked them according to volume of Tier 1 capital, a measure of capital adequacy that includes equity and disclosed reserves.
The Industrial and Commercial Bank of China (ICBC) and China Construction Bank held on to the two top spots, with Tier 1 capital of $249 billion and $202 billion respectively.
Bank of China knocked Bank of America from fourth place, with Tier 1 capital of $184 billion. The Agricultural Bank of China also climbed in the rankings to sixth from ninth place.
JPMorgan held onto its third place in the rankings, with Bank of America, Citigroup and Wells Fargo the other U.S. banks rated in the top 10.
Citigroup, like Bank of America, fell in the rankings, to seventh from sixth place, while Wells Fargo remained at number eight.
U.K. banks also fell in the rankings, having restructured and slimmed down following the 2007-08 financial crisis.
The U.K.'s highest-rated financial institution by The Banker, HSBC Holdings, now rates in ninth place, down from fifth last year and top in 2008. Barclays fell to 13th from 12th place last year and Royal Bank of Scotland declined to 18th from 15th.
"At one time, several U.K. banks were among a handful of truly global players. But since the financial crisis they have reduced their scope and are focusing on a fewer areas in a bid to restore profitability," said Brian Caplen, editor of The Banker in a news release.
"We may have seen the end of the UK-based global bank," he added.
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The ranking comes at a time when China is increasingly stepping on to the global stage, with efforts including its leadership of the nascent $50 billion Asian Infrastructure Investment Bank project.
Its success in the program has appeared to rile the U.S., with the infrastructure bank seen as a rival to the World Bank and the Asian Development Bank, both of which are strongly influence by the States.
Meanwhile, the U.K.'s Asia-focused HSBC and Standard Chartered are openly mulling moving their headquarter s abroad, citing the burden of financial regulation. This could see HSBC return to its historic headquarter of Hong Kong.
"With the U.K. holding an EU membership referendum next year, the concern must be that while the EU desperately needs reform, it will be too preoccupied with its own issues to properly consider arguments made by the UK government," said Caplen.
The Banker noted that as well as dominating by capital strength, Chinese banks also made the most profits. It said Chinese banks made 1.75 times more than U.S. banks and almost 10 times more than U.K. profits.
Chinese banks also gained in employment terms. The Banker said that ICBC's employees now numbered more than the entire U.K. banking sector, with HSBC, for instance, cutting its workforce by around 8 percent over the last four years.
—By CNBC's Katy Barnato, follow her on Twitter @KatyBarnato.