LONDON – Japanese banks have once again become the biggest overseas lenders, returning to a position they last occupied in the late 1990s before a deep banking crisis forced them to pull back from international markets.
The Bank for International Settlements (BIS), which charts cross-border lending around the world, on Sunday said Japanese banks were responsible for 13 percent of cross-border lending at the end of March, up from 8 percent in early 2007, after stepping up lending to emerging markets, Caribbean and U.S. borrowers.
The put Japanese lenders above U.S. and German banks, who accounted for 12 percent and 11 percent of cross-border lending at the end of March, respectively. British and French banks both accounted for just over 10 percent of loans.
The BIS report said Japanese banks funded their expansion mainly through financing from their large domestic deposit base.
They remain a long way below the dominant position they held in the late 1980s, however, when Japanese banks accounted for 39 percent of all cross-border lending at their peak, the BIS report said. Their share fell sharply through the 1990s and only turned higher six years ago.
Higher overseas lending from Japan in the first quarter of this year offset a drop in lending from Britain and the euro zone to leave total cross-border lending little changed, BIS said. Interbank lending continues to fall, but loans to non-financial firms are rising, it said.
Cross-border loans to China, Brazil and Russia expanded at a record pace in the first quarter, mostly to banks in those countries, taking the share of interbank lending to emerging economies to the highest level on record, BIS said.
(Reporting by Steve Slater; Editing by Ruth Pitchford)