London continues to thrive as a financial centre, having apparently ridden out the economic downturn. Financial services contributed Ł15.6bn to the UK’s surplus on invisible earnings in 2003, according to figures from International Financial Services, London (IFSL), and London operations were responsible for a significant proportion of this.
The UK remains a major international centre for investment and private banking in addition to commercial banking. Assets of the UK banking sector at the end of 2003 were Ł4165bn, of which foreign banks held the majority (52%). Bank of England figures show bank lending at the end of 2003 reached Ł2608bn, of which over one-third was targeted at overseas customers.
For the first time in two years, The Banker has produced its Foreign-owned Banks in London listing and, in spite of advances in technology and the ability of authorised EU institutions to accept deposits on a cross-border basis without maintaining a physical presence in London, 242 banks still regard such a presence as necessary. This figure is down only 33 from 2002 and many of the departures can be attributed to M&A activity among the parent banks throughout the world. One-third of the 242 are banks from EU countries. This growing presence is matched by the EU share of the foreign banks’ assets, namely 46% of the Ł2183bn held in 2003. US banks maintained a stable position with a share of foreign banks’ assets of between 12%-16% while the decline in Japanese banks continues.
