Foreign Bank Tracker 2024

2 minute read + PDF download  07.05.2024 John Elias, Amela McPherson

The Foreign Bank Tracker, now in its ninth year, reveals capital flow trends into Australia via foreign banks, and sets out a market analysis of the results.

Foreign bank activity often acts as a proxy for offshore investment trends because foreign banks typically follow their customers into jurisdictions. To produce the FBT, we drew on the Australian Prudential Regulation Authority (APRA) monthly banking statistics, focusing on the reporting of banks' total resident assets.

Find out more about foreign bank activity and capital flow into Australia in our full report.

In 2023, interest rate risks were realised through rapid cumulative increases across developed markets. Large global banks generally benefited from investors moving deposits to stronger institutions. This did not apply across the board, and the regulator-brokered acquisition of Credit Suisse by UBS, was a notable banking event in 2023.

The effect of this merger, and associated impact of the preceding US regional bank failures (including Silicon Valley Bank), is visible in our analysis of Australian banking statistics, with UBS under both its UBS and Credit Suisse licences shrinking its Australian balance sheets. Some well-known US money-centre banks, including JPMorgan Chase, Citi and State Street also reduced their Australian balance sheets for the second consecutive year.

Key findings and commentary

Europe and Asia exhibit growth and North America contracts for the second consecutive year

In aggregate, European- and Asian-based banks grew by $15.9bn in 2023, expanding the gap of total resident assets to North American-based banks, which declined by $14.2bn.

Highlights from this edition:

  • Europe and Asia exhibited growth in Australia, broadly in line with Australian GDP in 2023, and materially faster than the Australian major banks, or North American-based banks;
  • North America contracted for a second consecutive year; and
  • Asia now has more banking institutions operating in Australia than Europe and North America combined.

Find out more about foreign bank activity and capital flow into Australia in our full report.