International bank
lending rose marginally in the third quarter of 2012 but the trend toward
shrinking interbank business and the global retrenchment of euro area banks continued while credit to non-bank borrowers continued to grow, the Bank for
International Settlements (BIS) said.
Cross-border loans
by euro area banks have been declining since 2008 with their share of total
foreign claims on the U.S. non-bank private sector dropping to 26 percent at
the end of September compared with a peak of 43 percent end-2007.
The retreat of
euro area banks has made room for the advance of Japanese banks, which raised
their share of U.S. non-bank lending to 22 percent from 12 percent during the
same period, and Canadian banks, which boosted their share to 14 percent from
only six percent, BIS said.
Preliminary data
for international lending by banks in 31 countries showed that third quarter
cross-border claims rose by only $26 billion, or 0.1 percent, to $29.4
trillion from the second quarter, the BIS said. Final data, together with detailed
analysis, will be released in BIS’ quarterly review on March 18.
“Cross-border
credit to non-bank borrowers expanded noticeably, particularly to those in the
United States, whereas cross-border interbank claims contracted for the fourth
consecutive quarter,” the BIS said.
Global lending to
non-bank borrowers rose for the third consecutive quarter with claims on U.S.
borrowers expanding the most: by $96 billion, or by 4 percent.
Total lending to
borrowers in advanced economies expanded by a modest $100 billion, or 0.5
percent, in the third quarter, with interbank claims down while non-bank
borrowers increased their lending by $106 billion, or 1.3 percent.
While loans to
banks in the U.K. rose by $117 billion, or 3.3 percent, claims on borrowers in
the euro area contracted by $165 billion, or 3 percent, BIS said.
For the first
time, BIS included data from Korean banks, which showed that foreign loans by
Korean headquartered banks amounted to $121 billion at the end of September,
similar to the lending by Portuguese banks of $124 billion and slightly higher
than Brazilian banks’ claims of $98 billion.
Roughly half of
Korean banks’ claims were to borrowers in the Asia-Pacific region, lead by borrowers
in China, but among BIS' reporting banks, Korean banks were the largest creditors
to Cambodia and Uzbekistan and the second largest to Vietnam.
International
lending to borrowers in emerging economies shrank by $30 billion, or 1 percent,
in the third quarter, driven by lower interbank lending, especially to banks in
Asia-Pacific and Latin America. Non-bank lending, however, rose.
Cross-border
claims on banks in Latin America, including inter-office positions, fell by $12
billion, or 5 percent in the third quarter, the largest quarterly contraction
seen by the BIS since 2009.
However, figures
based on an ultimate risk basis – which reflect risk transfers and thus reveals
the nationality of the ultimate borrower – shows that the total exposure of BIS
reporting banks to Latin American borrowers in fact rose in the third quarter by
$16 billion to $156 billion.
In Asia-Pacific,
global lending to banks fell by $48 billion, or 6 percent, only the second
quarterly decline since 2009. The drop was driven by lower lending to banks in
China and Korea while lending to many other Asian countries rose, BIS said.
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