Bank of America has overtaken its US rival JP Morgan to rank as the world's top bank in terms of capital strength while Industrial and Commercial Bank of China tops the profit league, according to a new study by The Banker magazine.

BofA – now the world’s largest wealth manager although still a mainly US player – has come top in terms of its Basel Tier 1 capital ratio, with capital of $160 billion, while JP Morgan has $133 billion. The figures listed by the publication show that BofA's Tier 1 ratio has surged by almost 33 per cent since a year before.

In general, the capital strength of banking groups has improved since 2007; another notable feature is the rising profile of banks that are based in, or do significant amounts of business with, emerging markets.

The Tier 1 ratio is a key benchmark of a bank's presumed financial strength, part of a system of standards for evaluating the amount of capital that a bank has to guard against certain risks. Focus on such figures has intensified during the credit crisis, and policymakers are wrestling with ideas on how to make the rules work more efficiently. There have been concerns, for example, that capital adequacy rules can force banks to sell shares in a market downturn to bolster their capital reserves, or, in a market upturn, encourage a bank to run with low capital reserves.

Citgroup ranked third in the latest list, followed by the UK's Royal Bank of Scotland and HSBC. Citigroup has had its share of problems, being one of the most heavily hit by the credit crunch, forcing it to make a number of disposals. The high ranking of RBS in the list may prove a surprise as the bank is now part-owned by the UK government, which bailed it out with billions of pounds of taxpayers’ money.

Other banks in the top 10 for capital strength are BNP Paribas - now the largest eurozone wealth manager - Wells Fargo, ICBC, Santander and Barclays.

ICBC topped the rankings for 2009 pretax profits after earning $24.5 billion, ahead of China Construction Bank  on $20.3 billion, the report said. Goldman Sachs ranked third with a profit of $19.8 billion and Barclays was Europe's most profitable bank with $18.9 billion.