Bank of America has leap-frogged U.S. rival JPMorgan to rank as the world's top bank in terms of capital strength while Industrial and Commercial Bank of China (ICBC) tops the profit league, according to a new study.

Bank of America topped The Banker magazine's 2010 ranking of the world's banks, based on Tier 1 capital.

Its Tier 1 capital rose by a third from last year to $160 billion, which saw it swap places with JPMorgan, whose Tier 1 capital dipped 2 percent to $133 billion.

Bank of America, which is based in Raleigh, North Carolina and bulked up with the purchase of Merrill Lynch in 2008 as the financial crisis raged, headed The Banker's first ever Top 1000 list published 40 years ago, which was based on assets rather than capital.

Citgroup ranked third in the latest list, followed by Britain's Royal Bank of Scotland and HSBC.

The magazine uses Tier 1 capital as a measure of a bank's ability to lend on a large scale and endure shocks.

ICBC topped the rankings for 2009 pretax profit after earning $24.5 billion, ahead of China Construction Bank on $20.3 billion.

U.S. investment bank Goldman Sachs ranked third with a profit of $19.8 billion and Barclays was Europe's most profitable bank with $18.9 billion.

The biggest loss was posted by Anglo Irish Bank with an $18.5 billion hit. GMAC, the U.S. financial services firm majority owned by the U.S. government, and Citi followed with respective losses of $10.3 billion and $8.4 billion, according to the rankings.

Profits for the top 1000 banks were almost four times higher than in 2008, but returns have fallen sharply from the boom years, the data showed.

U.S. banks swung to a $37.5 billion profit last year from a $91 billion loss, while British banks recovered to a $29.5 billion profit from a $51 billion loss and EU banks swung back to a $103.8 billion profit from a $16 billion loss in 2008.

In contrast, Japan's banks lost $11.1 billion last year after making profits of $16.5 billion previously.

The magazine said China now has 84 banks in the top 1000, up from 52 a year earlier. They account for 9 percent of capital in the top 1000, but a quarter of profits.

(Reporting by Steve Slater; Editing by David Cowell)

Japan United kingdom China Goldman sachs