The trend in falling loan-to-deposit (LTD) ratios continued in the 2016 Top 1000 World Banks ranking, as the aggregate ratio dropped by 1.94 percentage points to 85.3%. This marks a contrast to 2015’s ranking, when the LTD ratio dropped by only 0.95 percentage points, the smallest decline in years. However, whereas in the 2015 ranking banks worldwide declined across the board, in this year’s ranking the fall can be specifically attributed to two regions: Asia-Pacific and North America.
The fall was most pronounced in the Asia-Pacific region, where the LTD ratio shrank by 2.93 percentage points relative to the 2015 ranking, to 70.98%, confirming the region’s status as least dependent on loans worldwide. This can partly be attributed to the growing number of Chinese institutions in the ranking – two new Chinese lenders appeared this year, bringing the total to 119 – which routinely maintain low LTD ratios.
