The latest round of statistics on total assets released by the Bank for International Settlements (BIS) reveals the extent to which many European banks are slimming down to boost low profits, and how others have had to recognise bad loans.
The UK, Netherlands and Italy – three markets with varying prospects and degrees of health – provide a snapshot of the European banking sector’s shrinking asset base.
At the beginning of 2014 UK lenders’ collectively owned more than $9000bn in assets. That figure has slumped by more than 25% over the past three years. Notwithstanding last year’s Brexit referendum and sterling’s depreciation, the sector shrunk more over the course of 2015 (by $1223.1bn) than 2016 ($722.2bn).
Italy, regarded in recent years as one of Europe’s most troubled banking sectors, shrank significantly during 2014 (from $4718.6bn to $4012bn). In the years since it has continued to diminish, but at a slower pace. At the end of 2016, its banks owned just less than half of their UK peers.
The Netherlands, meanwhile, has soared up The Banker’s International Financial Centre rankings and has benefited from the strength of locally-headquartered stalwarts ING and Rabobank. Nevertheless, its banks’ global asset base has shrunk nearly 20% in the three years since the end of 2013.
A very different story is playing out across the pond, where total assets owned by US and Canadian banks have grown year-on-year since 2013.
All data sourced from the BIS website.
