Foreign banks maintained asset growth in Australia in 2021 but the rate of growth was well below the 2020 level, according to Minter Ellison’s latest Foreign Bank Tracker.
Minter Ellison lead partner John Elias, said the result was better than expected, given COVID restrictions and related challenges.
Elias said agribusiness, commercial property and renewable energy were the sectors targeted for investment by foreign banks and their clients in Australia last year.
The survey of resident assets of foreign banks is based on APRA data. It shows that Asian banks were the laggards last year, with resident Australian assets growing by 0.3 per cent, or A$577 million, to a little over $200 billion. The rate of growth was down from 12 per cent in 2020.
Among the Asian banks, Japan’s MUFG Bank, South Korea’s Woori Bank and Shinhan Bank, and China’s Bank of China, China Construction Bank, Bank of Communications and Agricultural Bank of China all reduced resident assets.
As a result of MUFG’s asset contraction, Sumitomo Mitsui Banking Corp is now the biggest Asian bank in Australia, followed by Bank of China.
North American banks grew their assets by 17 per cent, or $21.8 billion, to $152.5 billion in 2021. The rate of growth was down from 26 per cent in 2020.
JP Morgan was the second-fastest growing foreign bank in Australia last year, more than doubling its assets to more than $40 billion. It has overtaken Citi as the biggest US bank in Australia, following the sale of Citi’s consumer banking business to NAB.
Other North American banks that grew assets last year were Bank of America and Bank of Nova Scotia, while Citi, Bank One and The Northern Trust company all contracted.
European banks’ resident Australian assets by 5 per cent, or $14.2 billion, to more than $270 billion. The rate of growth was down from 7 per cent in 2020.
Société Générale more than doubled its resident assets and was the fastest growing foreign bank in Australia last year.
BNP Paribas and Rabobank also grew, while Deutsche Bank ABN Amro, UBS and HSBC Bank Australia contracted.