22 January 2020

BIS international banking statistics at end-September 2019

Global cross-border bank claims continued to expand rapidly. As in previous quarters, the expansion was mainly due to claims on the nonbank sector. European banks’ cross-border lending, which went through a prolonged contraction after the Great Financial Crisis (GFC) of 2007–09, has been expanding again since the start of 2018.

The BIS locational banking statistics show that banks' global cross-border claims grew by $660 billion during Q3 2019, reaching $31 trillion at end-September. The resulting year-on-year (yoy) growth rate of 9% was the highest since end-March 2008.

The global expansion was driven mainly by claims on advanced economies, which increased by $577 billion in Q3, or 10% yoy. Lending to offshore financial centres also continued to grow rapidly, by $74 billion in Q3, or 9% yoy, reaching $5 trillion at end-September 2019.

By contrast, claims on emerging market and developing economies contracted by $6 billion in Q3, which brought their yoy growth rate down to 3%. The biggest individual-country decreases were in claims on China (-$33 billion), Turkey (-$9 billion) and Mexico (-$4 billion).

As in previous quarters, cross-border claims on non-banks continued to expand rapidly. They rose by $380 billion in Q3 2019 (+12% yoy) and reached $15 trillion at end-September 2019. The growth in claims on non-bank financial institutions (+17% yoy) has been particular strong, outpacing the growth in claims on all other counterparty sectors. Cross-border interbank lending, expanded at 6% yoy, its highest annual growth rate since the GFC.

The locational banking statistics by nationality suggest that the post-GFC contraction in European banks' cross-border lending has reversed since the start of 2018.

The period after the GFC saw considerable divergence between the cross-border activities of European and non-European banks. Banks headquartered in Europe decreased their international presence considerably. Between mid-2008 and end-2017, German banks' cross-border claims on non-banks contracted at an average annual rate of 5%; and those of French banks declined at 2% per year. By contrast, Japanese and US banks' claims grew at average annual rates of 7% and 4%, respectively.

Since the start of 2018, European banks' cross-border lending has been expanding again. Between Q1 2018 and Q3 2019, the average annual growth rate of cross-border claims on non-banks was 11% for UK banks and 9% for euro area banks as a whole. However, there is a substantial degree of heterogeneity among major bank nationalities from the euro area. On the one hand, French banks' claims expanded at an average annual rate of 21%. On the other, the claims of German banks remained virtually unchanged during the same period.

Full statistical release on BIS

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