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IDENTIFY ENGAGE CREATE 2021 Foreign Bank Tracker
MinterEllison | Foreign Bank Tracker 2021 2
Introduction
Welcome to the sixth edition of our Foreign
Bank Tracker, which analyses capital flow trends
into Australia via foreign banks. Informed by the
Australian Prudential Regulation Authority (APRA)
statistics, and our own experiences with clients
across the globe, our report provides market
analysis and predictions around ongoing foreign
investment patterns into Australia.
In 2020, major events threatened the investment
landscape throughout the world. And yet, in spite
of all the turmoil, foreign banks continued their
expansion into Australia.
Creating value from
capital flow John Elias
Lead Partner,
Stuart Johnson
Managing Partner of
Foreign Bank Tracker Capital Markets Corporate
MinterEllison | Foreign Bank Tracker 2021 3
This year’s report
highlights several
key trends:
As global economies Foreign banks’ growing
While growth was slower shift to ‘recovery mode’, presence in Australia
than in previous years, foreign we anticipate more reflects that overall long
banks continued to increase opportunities and increased term confidence.
their presence in Australia. foreign bank growth.
Looking ahead, we’re
As 2021 continues, we’re likely to continue seeing
seeing growing confidence some volatility as markets
in the market, driven by around the world shift and
North American banks the vaccine rollout and recover from the economic
grew resident Australian economies being reopened. slowdown and market
assets by 26% In 2020, businesses were uncertainty – and, at different
focused mainly on survival. paces. Overall, however,
Now momentum is building the foreign bank activity
as businesses start to paints a positive picture of
recover and repay loans to capital flow into Australia.
banks, governments provide With increased government
Asian banks European banks
incentives for business stimulus, customers
grew by 12% grew by 7%
spending and growth, and embracing digital solutions
funds with capital to spend and Australia offering a
are looking for opportunities relatively stable market, we
to invest. have high confidence there
will be plenty of opportunities
ahead.
While overall this is a little and the Foreign Investment driven by the COVID-19
slower than in previous Review Board (FIRB) lowering pandemic – lockdowns and
years, the growth patterns the threshold to zero for FIRB the economic slowdown,
are promising. The figures scrutiny. travel disruptions and
are all the more impressive cashflow volatility – long term
when one considers the 2020 While economies around prospects are positive as banks
events including investments the world were impacted by find themselves in relatively
stalling, deals falling through a number of factors largely stable positions.
MinterEllison | Foreign Bank Tracker 2021 4
Contents
6 Key highlights 20 Japan
8 The Global Picture 21 Singapore
10 Key Findings: Europe 22 India
12 Germany and France 23 South Korea
13 The Netherlands and Switzerland 24 Key Findings: North America
14 UK Banks 28 North America
16 Key Findings: Asia 29 Canada
Asian Banks:
17 30 Conclusion
Total resident asset value and growth
18 Mainland China 31 About this report
19 Taiwan 32 Contacts
MinterEllison | Foreign Bank Tracker 2021 5
Key highlights
Two new banks North America Asia:
Both European:
Fastest growing Asian Bank growth
region in 2020. slowed from to
Up
17% 12%
26%
in resident Australian asset growth
Taiwanese
banks grew
Transferwise (HQ UK); granted a (restricted)
banking license in November 20
17%
US Banks: Chinese banks
27%
dropped from to
20% 13%
Intesa Sanpaolo SPA (Italy)
Canadian: Japanese banks grew
19% 12%
MinterEllison | Foreign Bank Tracker 2021 6
Europe:
Grew resident Australian assets by The exception is with France
– with French banks recording
7% the weakest growth
since 2017.
41% growth.
Relatively subdued growth
United Kingdom Germany
5% 3%
Switzerland The Netherlands
1% 8%
MinterEllison | Foreign Bank Tracker 2021 7
The Global Picture
Resident Assets Over the past year, North
by Region American banks in Australia have
been the fastest growing of banks
from the three different regions.
• F
astest growing foreign banks
fairly evenly spread between
the different regions: three
from Europe, three from North
1. Europe America, and four from Asia.
• B
anks in top 10 had a sizeable
presence in Australia - just two
having less than $1bn in assets.
• G
rowing presence of large
foreign trust banks: Northern
Trust, State Street and BNP
Paribas are three of the four
2. Asia
largest banks in the top 10
fastest growing banks
• S
ociety Generale and Paypal
both made the top 10 fastest
growing foreign banks in their
second year in APRA’s data,
and neither are the smallest
two banks in the top 10.
3. North America
MinterEllison | Foreign Bank Tracker 2021 8
Total Resident Assets Held by Total Resident Assets Held by Foreign Banks
Foreign Banks in Australia – growth rates in Australia CAGR since 2002
60% 40%
50%
30%
40%
30% 20%
20%
10%
10%
0% 0%
-10%
-10%
-20%
-30% -20%
2003 2005 2007 2009 2011 2013 2015 2017 2019 2003 2005 2007 2009 2011 2013 2015 2017 2019
Europe North America Asia Europe North America Asia
Total Resident Assets Held by Total Resident Assets Held
Banks in Australia – growth rates by Foreign Banks in Australia
350
50% 300
A$ billions
40% 250
30%
200
20%
10% 150
0%
100
-10%
50
-20%
-30% 0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Europe North America Asia Au Majors Australian GDP Europe North America Asia
MinterEllison | Foreign Bank Tracker 2021 9
Key Findings: Europe There are now 19 European banks operating in Australia. 2020 saw two new entrants: TransferWise Australia (a subsidiary of the UK headquartered TransferWise) and Intesa Sanpaolo SPA from Italy. MinterEllison | Foreign Bank Tracker 2021 10
Key Findings: Europe
French banks in aggregate UBS almost completely offset Australia in 2019 following a six- contracted resident Australian
recorded the fastest growth by a contraction in assets from year absence. BNP Paribas, ABN assets over the past year;
rate of 41%, driven by strong Credit Suisse. Amro, Standard Chartered and however it is worth noting that
growth from both Société Investec Bank all grew Australian for two of these three banks
Générale and BNP Paribas. In Société Générale was the fastest assets by over 20% in 2020. they have additional locally
contrast, Swiss banks were in growing bank, increasing in licenced entities which grew.
aggregate the slowest growing size by approximately 3¾x, off Credit Suisse, Cooperative
at just 0.7%, with growth by a small base after reopening in Rabobank and the HSBC all
60%
350 Europe Banks
A$ billions
300
50% YOY% growth
40%
250
30%
The Netherlands
200 20%
UK
10% Germany
150
France
0%
100 Switzerland
-10% Cyprus
50 Ireland
-20%
Spain
0 -30% Total Europe Growth %
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
European banks grew Dutch banks are the largest ING Bank (Australia) is the
resident Australian assets by in Australia (mainly ING but largest European bank in
$18.6bn in aggregate, the also Rabobank), followed by Australia, followed by HSBC
equivalent of 7%. British banks (mainly HSBC). Bank Australia, Rabobank
and UBS.
MinterEllison | Foreign Bank Tracker 2021 11Europe
Germany and France
45
A$ billions
60% German Banks
50%
40 YOY% growth
35 40%
30%
30
20%
25
10%
20
0%
15
-10%
10 -20%
Deutsche Bank Aktiengesellschaft
5 -30% WestLB AG
0 -40% Dresdner Bank AG
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Germany Growth %
60 200%
A$ billions
French Banks
50 150% YOY% growth
40 100%
30 50%
20 0%
10 -50% BNP Paribas
BNP Paribas Securities Services
0 -100% Societe Generale
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total France Growth %
MinterEllison | Foreign Bank Tracker 2021 12Europe
The Netherlands and Switzerland
140 50%
A$ billions Dutch Banks
120 40% YOY% growth
100
30%
80
20%
60
10%
40
ING Bank
20 0% Rabobank
Fortis Bank SA/NV
0 -10% ABN AMRO Bank N.V.
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Netherlands Growth %
30 80%
A$ billions
Swiss Banks
25 60% YOY% growth
20 40%
15 20%
10 0%
5 -20%
UBS AG
0 -40% Credit Suisse AG
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Switzerland Growth %
MinterEllison | Foreign Bank Tracker 2021 13Europe
UK Banks
In the UK, 2020 had Unfortunately COVID-19 meant And while the first half of 2020 As global economies start to With growing confidence in the
been the year everyone that the market halted again. saw a slowdown in market recover from lockdown periods, UK as a result of the COVID-19
We saw fairly weak growth in activity, by June it had picked businesses are starting to repay vaccine rollout and the UK
was waiting for – with
UK-based banks, and a drop in back up. We still saw interest in loans again, which will assist government’s budget measures
Brexit coming to an end the total UK growth percentage. Australian targets. While deals banks in maintaining their capital to stimulate spending and
and the UK elections However, 2020 saw the entry of a were significantly slower to close, adequacy thresholds. Private growth, we’re anticipating a
recently taking place, new bank, TransferWise Australia, activity was still taking place, equity funds are holding onto boom of market activity – and
investors were looking which is a subsidiary of the UK particularly towards the end of a significant amount of capital, Australia remains an attractive
forward to a period headquartered TransferWise. the year. and are looking for opportunities location for investment.
to invest.
of stability.
120 60% UK Banks
A$ billions
50% YOY% growth
100 HSBC Bank Plc
40%
The Royal Bank of Scotland plc
30% The Royal Bank of Scotland N.V.
80 Barclays Bank PLC
20% Bank of Scotland plc
Lloyds TSB Bank plc
60 10% Investec Bank
NM Rothschild & Sons
0% (Australia) Limited
40 Standard Chartered
-10%
Total UK Growth %
-20%
20
-30%
0 -40%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 14MinterEllison | Foreign Bank Tracker 2021 15
Key Findings:
Asia
orth Asian countries who
N
are major trading partners of
Asian banks grew resident Australian Australia, namely China, Japan
assets by $20.4 billion in aggregate, and also Taiwan, recorded double
the equivalent of 12%. While the growth digit growth.
rate slowed, Asian foreign bank growth
appears to be a trend set to continue.
2020 saw a lag in capital investment and
deals from Asian investors as short term,
lockdowns paused economic activity
earlier in the year, but the end of the year ank of Baroda from India was
B
saw deals picking back up. the fastest growing Asian bank,
more than doubling resident
assets – though from a low base.
hina Everbright increased
C
resident assets by over 80%,
and Bank of Communications
increased resident assets by
over 50%.
MinterEllison | Foreign Bank Tracker 2021 16Asia
Key Findings: Asian Banks:
Asia Total Resident Asset Value and growth
• T
here are 28 Asian banks Asian Banks YOY% growth
operating in Australia -
unchanged since last year. Japan China Singapore Taiwan India Korea Total Asia Growth %
• J
apanese banks have the
largest regional presence
in Australia, followed by
250 60%
Chinese banks.
A$ billions
• M
UFG (Japan) is the largest
50%
in Australia. SMBC (Japan) is
second largest, followed by 200
Bank of China (China). 40%
• M
izuho Bank (Japan) is the
fourth largest bank followed by 30%
UOB (Singapore), ICBC (China) 150
and OCBC (Singapore).
20%
100
10%
0%
50
-10%
0 -20%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 17Asia
Mainland China
The overall story for the Bank of China remains the The top 3 Chinese banks by Australia and continued interest The ongoing impact of
mainland Chinese banks largest Chinese bank by resident Australian resident asset growth in renewable energy and energy COVID-19 and China’s 14th five
Australian assets. Its percentage in percentage terms are China storage. This reflects a goal year plan will, however, shape
appears to be one of
growth relative to other Chinese Everbright Bank, Bank of recently set by the Chinese these trends.
continued, measured banks in Australia has slowed Communications and Bank of government to achieve carbon
growth among larger in recent years, allowing China. peak by 2030, and carbon
established players and China Everbright and Bank of neutrality by 2060. We also
continued searches for Communications to pass it as the We continue to expect the trend expect a continued interest in
fastest growing Chinese bank in and approach of China’s banks industries such as minerals and
growth among newer,
Australia. to follow their clients, which resources, education, agtech,
smaller, market entrants.
includes ongoing investment in biomedicine and health.
70 250% Chinese Banks
A$ billions
YOY% growth
60
200%
Bank of China Limited
50
150% Bank of China
(Australia) Limited
40 Industrial and Commercial
Bank of China Limited
100%
China Construction Bank
30 Corporation
Agricultural Bank of
50% China Limited
20
Bank of Communications
Co., Ltd.
0% China Merchants Bank
10
Co., Ltd
China Everbright Bank
0 -50% Co., Ltd
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Chinese Growth %
MinterEllison | Foreign Bank Tracker 2021 18Asia
Taiwan
In aggregate, Taiwan’s Mega International Commercial The top three Taiwanese The Taiwanese banks’ presence
banks now have $13.3bn Bank remains the largest banks by percentage growth in in Australia remains an area of
Taiwanese bank by resident Australian resident assets were healthy growth to be watched,
of resident Australian
assets in Australia. Taishin International Bank, Hua albeit on a smaller scale to
assets, up 17% over the Nan Commercial Bank and Mega mainland China.
past year. International Commercial Bank.
14 80% Taiwanese Banks
A$ billions
70% YOY% growth
12
60%
10 50%
40% Mega International
8
Commercial Bank Co., Ltd.
30% Taiwan Business Bank
6 20% First Commercial Bank
Hua Nan Commercial Bank, Ltd.
10%
4 Taiwan Cooperative Bank, Ltd
0% E.SUN Commercial Bank, Ltd.
2 Taishin International Bank
-10% Co., Ltd
Bank of Taiwan
0 -20%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Taiwan Growth %
MinterEllison | Foreign Bank Tracker 2021 19Asia
Japan
Japanese bank activity Consistent with SMBC’s strong Finally, the decision by the Marubeni, Sumitomo and MUFG, SMBC and Mizuho Bank
in Australia continues 22% growth in 2020, we expect Japanese Government to ITOCHU have committed to no have all recently announced new
SMBC’s exposure to grow in become carbon neutral by longer participate in new coal- investments funds that will focus
to go from strength to
Australia in the short-to-medium 2050 is a significant policy fired power plants whilst Mizuho on both domestic and overseas
strength. MUFG remains term following their commitment announcement that will further Financial Group has halted all renewable energy assets and
Japan’s largest bank to the NSW Government in accelerate the trends we have new financing for such projects incorporate environmental, social
in Australia and grew respect of the Western Sydney been seeing in the Japanese and aims to reduce outstanding and governance factors into their
its resident Australian Airport and Western Sydney market in recent years towards credit for such projects to zero investment decisions.
assets by 5% or $1.3bn to Aerotropolis, Australia’s largest the adoption of domestic by 2040. Conversely, each of
single infrastructure project renewable energy.
$30.7bn last year.
which is expected to commence
operations in 2026.
Japanese Banks YOY% growth
Both SMBC and Mizuho Bank also
The continued double-digit MUFG Bank, Ltd. Sumitomo Mitsui Mizuho Bank, Ltd. Total Japan Growth %
strengthened their presence with
growth in Japanese bank assets Banking Corporation
$29.3bn and $19.8bn in resident
in Australia reflects the broader 90 80%
assets respectively, increasing by
economic trends in Japan. The A$ billions
$5.2bn and $2.1bn respectively 80 70%
Japanese economy, like all
over the past year, equivalent to
major economies at present, is 60%
increases of 22% and 12%. This 70
under pressure from the global
places all three of these Japanese 50%
headwinds that COVID-19
banks within the top 10 foreign 60
presents. Coupled with a 40%
banks by resident assets in
decreasing Japanese population 50 30%
Australia.
and the Bank of Japan’s inability
to reach its 2% inflation targets, 40 20%
these factors are driving Japan’s 10%
30
mega banks offshore for growth
0%
opportunities, together with the 20
remainder of Japan Inc. -10%
10 -20%
0 -30%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 20Asia
Singapore
Throughout 2020, Against this backdrop, Australia Through its 2021 budget, There is a continued emphasis chains in the region. This should
overall growth from has remained an attractive Singapore has indicated that on positioning Singapore as translate into an increasing
investment destination for it will continue to support the a global node of technology, number of commercial and
Singapore’s three banks
public and private Singaporean recovery from the COVID-19 innovation and enterprise, and economic links between
present in Australia investors. With a view towards pandemic, but at the same time, placing Singaporean firms at Singapore and Australia in the
continued – although long term opportunities, Australia position itself for future growth. the intersection of key global coming years.
their growth rate has is generally seen by Singaporean
decreased from previous investors as a close, safe and
years. stable jurisdiction.
Being a relatively small, but highly
Real estate, infrastructure and
developed and sophisticated
education have always been key
country with strong economic
areas of interest for Singaporean Singaporean Banks YOY% growth
foundations, Singapore was able
investors. We also saw increased
to swiftly react to the economic United Overseas Oversea-Chinese Banking DBS Bank Ltd Total Singapore Growth %
interest in technology and Bank Limited Corporation Limited
challenges of the COVID-19
agriculture assets during
pandemic via a range of stimulus 35 80%
2020. The Australia-Singapore
measures, ranging from the
Digital Economy Agreement A$ billions 70%
Stabilization and Support 30
(DEA) entered into force on 8
Package to various employment 60%
December 2020. The DEA aims
related, sector specific and 50%
to facilitate more digital trade 25
general economic stimulus
opportunities through cross- 40%
measures. While Singapore’s
border data flows, developing 20
GDP contracted in 2020, the year 30%
standards for open banking
ended on a generally optimistic 20%
and encouraging collaboration 15
note as the economy shrank less
between FinTech and RegTech 10%
than expected.
enterprises, which could see
10 0%
increased interest and activity in
the technology space. -10%
5
-20%
0 -30%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 21Asia
India
COVID 19 and its downstream Corporate clients generally The pick up in the Australian
impact on supply chain and deferred their debt raising plans economy in recent months
other activities, had a profound during the difficult and uncertain and the generally more upbeat
impact on capital flows and COVID impacted year, and in environment is reflected in an
business volumes of Indian banks common with Australian banks, uptick in more recent activity.
operating in Australia. Exposure Indian banks were kept busy Indian banks expect that 2021
to corporates, particularly in extending all necessary support to will see a return of their business
relation to working capital and their corporate clients to weather activity to pre-COVID levels
resident assets declined during the impact of the pandemic. and growth momentum will be
the year. So too did trade finance This included extending liquidity regained.
volumes which were down by mismatch support, waivers of
approximately 15 – 20 %, year covenants and deferral of fees
on year. and interest charges.
Indian Banks YOY% growth
State Bank of India Bank of Baroda Union Bank of India Total India Growth %
3.5 350%
A$ billions
3.0 300%
250%
2.5
200%
2.0
150%
1.5
100%
1.0
50%
0.5 0%
0.0 -50%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 22Asia
South Korea
The COVID-19 pandemic kangaroo bonds in the amount and project financing of the Once COVID-19 is contained due to IPO later this year) has
has caused global of $500 million, $400 million 162MW Columboola solar farm and we reach a post pandemic around 13.6 million users and
and $400 million respectively, in Queensland. Additionally recovery, greater consideration is commended for its speed,
economic disruption
in an effort to provide loans in February 2020, the Reserve should be given to Korea’s new contactless service and low
resulting in a major to South Korean companies Bank of Australia renewed the and emerging digital banking interest rates. Accordingly, the
slowdown in Korean impacted by the coronavirus bilateral local currency swap market which now coexists with opportunities in Australia look
export and domestic and to finance eco-friendly agreement with the Bank of traditional banking. Internet-only fruitful once both economies
consumption. projects. Korea’s attraction Korea which is reflective of the banking is on the rise and has walk the road to recovery with
towards renewables remained commitment towards bilateral gained widespread attraction many speculating that the era
steady with one of Korea’s major trade notwithstanding a period of particularly from retail customers. of Korea’s digital banking to be
With Korea’s GDP experiencing financial players, Hana Financial financial uncertainties. Notably, Korea’s mobile-only just the beginning of the nation’s
the steepest decline since the Investment, sealing its $199 bank, Kakaobank (which is surge in technology investment.
Asian Financial Crisis in 1998, million acquisition, development
it appears that the nation’s
potential for penetrating the 2,500 600% Korean Banks
Australian banking sector,
which was well on track, is now A$ millions YOY% growth
500%
deprioritised as the focus has
2,000
become keeping the momentum
in local economic recovery. 400%
While activity in the Australia- 1,500
300%
Korea banking sector remained
sluggish, 2020 still witnessed
a number of meaningful 200%
1,000
investments. The major
Korean banks such as Korea 100%
Development Bank, Woori
500 KEB HANA Bank
Bank and Shinhan Bank issued
0%
Woori Bank
Shinhan Bank Co., Ltd
0 -100%
2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Korea Growth %
MinterEllison | Foreign Bank Tracker 2021 23Key Findings: North America While North American banks are the smallest foreign region by resident Australian assets, they grew the fastest of the three global regions over the past year - by 26% or $26.6bn to $130.6bn. There are 11 North American banks operating in Australia. MinterEllison | Foreign Bank Tracker 2021 24
Key Findings: North America
In percentage terms, the larger In summary:
US banks grew faster than
• N
orth American banks grew resident
Canadian banks, with growth Australian assets by 26% or $26.6bn to
over the past year of 27% vs $130.6bn in aggregate.
19% - which when expressed
in terms of dollars growth in • U
S banks have over five times the
resident Australian assets of Canadian
resident assets is even more
banks.
pronounced: $23.4bn vs $3.3bn.
• T
he major US banks dominate the
North American banks with residents in
Of individual banks, the Northern Trust was Australia, led by Citibank, JP Morgan and
the fastest growing, increasing resident Bank of America, with North American
assets by over three times, an increase of trust banks such as Northern Trust, State
over $8.1bn in resident assets, followed by Street continuing to grow strongly too.
State Street, Paypal, and JP Morgan, which
all recorded over 30% growth in resident
assets.
Bank of America and Bank of New York
Mellon both contracted resident Australian
assets over the past year. orth American banks grew
N
resident Australian assets
by
26%
or $26.6bn to $130.6bn
in aggregate.”
MinterEllison | Foreign Bank Tracker 2021 25North America
North America
140 40% North American
A$ billions Banks YOY% growth
120
30% US
Canada
Total North America Growth %
100
20%
80
10%
60
0%
40
-10%
20
0 -20%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 26North America
North America
140 40% All North American
Banks YOY% growth
120 Citibank, N.A.
A$ billions 30%
Citigroup Pty Limited
JPMorgan Chase Bank,
National Association
100
Bank of America,
20% National Association
Royal Bank of Canada
State Street Bank and
80 Trust Company
The Toronto-Dominion
10% Bank
The Northern
60 Trust Company
The Bank of Nova Scotia
Canadian Imperial Bank
0% of Commerce
40 PayPal Australia Pty Limited
Bank One, National Association
The Bank of New York Mellon
-10%
20 Total (All) Growth %
0 -20%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
MinterEllison | Foreign Bank Tracker 2021 27America
North America North America was While there was a concern that
the fastest growing US banks may have withdrawn
from overseas markets to focus
region for overseas
on domestic priorities in 2020
banks in Australia in due to the pandemic, this has
2020, growing resident not been the case. In fact, activity
US Banks YOY% growth Australian assets by 26%. and assets grew at a steady rate
as it became evident that the
Citibank, N.A. Citigroup Pty Limited pandemic would not evolve into
US banks have over five times
JPMorgan Chase Bank, National Association Bank of America, National Association the resident Australian assets of a financial crisis.
State Street Bank and Trust Company The Northern Trust Company Canadian banks.
Non-traditional banks such
PayPal Australia Pty Limited Bank One, National Association
Citibank’s dominant presence in as Paypal also increased their
The Bank of New York Mellon Total US Growth % presence and activity in Australia,
terms of US bank assets located
in Australia has been reduced competing with non-bank
since the Global Financial Crisis financial services. American
120 40%
and no longer accounts for the Express also expanded into
A$ billions majority of US bank Australian Australia to compete with
resident assets. Alternative established banks, launching its
100 30%
financial services companies small business lending offering –
have seen significant growth, its first market for this outside of
80 20% including Northern Trust who the US.
have made a conscious decision
to increase their presence and With banks and consumers
60 10% take on competitors in Australia, across the world embracing
with a particular focus on asset online banking like never before,
management. US banks pushing towards digital
40 0% transformation are continuing
to lead the world in digital and
mobile banking. We’re seeing
20 -10% technologies such as artificial
intelligence, robotic process
automation and other disruptive
0 -20%
banking technologies starting
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
to gain traction – and the US is
leading the way.
MinterEllison | Foreign Bank Tracker 2021 28Canada
Similar to banks from Canadian Banks YOY% growth
several Asian countries,
there are three Canadian Royal Bank of Canada The Toronto-Dominion Bank The Bank of Nova Scotia
banks with resident Canadian Imperial Bank of Commerce Total Canada Growth %
Australian assets.
The largest of these is Royal 25 80%
Bank of Canada, with $11.0bn of
resident Australian assets, just A$ billions
over half of the total Canadian 60%
banks’ resident Australian assets 20
of $20.5bn.
40%
It was the slowest growing
Canadian bank by resident
Australian assets in percentage 15
20%
terms, with other Canadian banks
outgrowing it in both percentage
and dollar terms, although there
0%
was not too much difference in 10
dollar terms, with all Canadian
banks growing resident assets
between $1.0bn and $1.2bn. -20%
The Bank of Novia Scotia was the 5
fastest growing Canadian bank, -40%
increasing resident assets by 33%
or $1.2bn.
0 -60%
We anticipate further Canadian
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
bank growth in Australia in the
coming years, reflecting broader
macro-economic shifts.
MinterEllison | Foreign Bank Tracker 2021 29Conclusion
The data we explored While foreign bank growth Now banks find themselves in a There are challenges – travel Our multidisciplinary,
in this report around wasn’t as strong as it had been in fortunate situation, with money restrictions, regulatory hurdles international team at
previous years, we observed that to invest and opportunities to including FIRB and ACCC MinterEllison can help you
foreign bank activity
in many cases, market activity explore. requirements and managing navigate the challenges
and capital flow paints paused for a period of time – multiple state jurisdictions, for and take advantage of the
a far more positive but it restarted before the end of Compared to other markets, example. However, the results opportunities with investing in
picture than many had the year. Australia has been relatively are extremely rewarding – Australia.
anticipated throughout stable throughout 2020 and and foreign banks’ continued
is an increasingly attractive growth reflects that optimism. Contact us for a tailored
2020.
investment destination. discussion of your interest.
MinterEllison | Foreign Bank Tracker 2021 30About this report
MinterEllison’s sixth edition Foreign Bank Tracker
provides insights and key trends on the growth of
resident assets held by foreign branch and subsidiary
banks in Australia.
Our insights are based on data • T
he Domestic books of a bank
from the Australian Prudential has the following scope:
Regulatory Authority (APRA)
which assess the size of foreign – includes operations/
bank loan books across three transactions booked or
regions – Asia, Europe and US/ recorded inside Australia;
Canada. The data analysed in this
report is current to 31 December – d
oes not consolidate
2020. Australian or offshore
controlled entities;
• “ Resident assets” refers to all
assets on the banks’ domestic – includes transactions of
books. Unless otherwise stated, Australian-based offshore
the statistics analysed relate banking units;
to the operations/transactions
– e
xcludes transactions of
conducted with residents that
overseas-based offshore
are recorded on the domestic
banking units;
books of licensed banks.
– e
xcludes offshore branches;
• T
he term “Total resident assets”
and
has been used throughout this
report. It refers to all assets on
– e
xcludes transactions, assets
the banks’ domestic books that
and liabilities with offshore
are due from residents. To put
branches.
simply, it shows the value of
assets the foreign banks hold in
Australia.
MinterEllison | Foreign Bank Tracker 2021 31Contacts John Elias Jeremy Blackshaw Rahoul Chowdry Lead Partner, Managing Partner, Partner, Foreign Bank Tracker International Financial Services Industry Lead +61 2 9921 4115 +61 3 8608 2922 +61 2 9921 8781 john.elias@minterellison.com jeremy.blackshaw@minterellison.com rahoul.chowdry@minterellison.com UK & Europe Mainland China Japan Singapore Nicola Marley Bi Chen Geread Dooley Jeremy Blackshaw Steven Wang +44 (0) 207 429 2786 +86 10 6535 3477 +61 2 9921 4081 +61 3 8608 2922 +61 3 8608 2901 India South Korea Canada US Rahoul Chowdry Tom Shon Brendan Clark Jeremy Blackshaw Geoff Earl +61 2 9921 8781 +61 2 9921 4214 +61 7 3119 6455 +61 3 8608 2922 +61 2 9921 2531 MinterEllison | Foreign Bank Tracker 2021 32
MinterEllison | Foreign Bank Tracker 2021 33
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