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Our latest Foreign Bank Tracker report, which analyses capital flow trends into Australia via foreign banks, illustrates a positive trend.
During the year in review, major events threatened the investment landscape throughout the world. Despite all the turmoil, foreign banks continued their expansion into Australia.
To develop our analysis we reviewed Australian Prudential Regulation Authority (APRA) statistics alongside our own experiences with domestic and international clients. In doing so we reveal foreign investment patterns into Australia and make predictions about future activity.
This year’s report highlights several key trends.
While growth was slower than in previous years, foreign banks continued to increase their presence in Australia.
While overall this is a little slower than in previous years, the growth patterns are promising. The figures are particularly impressive when considering 2020 events including investments stalling, deals falling through and the Foreign Investment Review Board (FIRB) lowering the threshold to zero for FIRB scrutiny.
While economies around the world were impacted by a number of factors largely driven by the COVID-19 pandemic – lockdowns and the economic slowdown, travel disruptions and cashflow volatility – long term prospects are positive as banks find themselves in relatively stable positions.
As 2021 continues, we’re seeing growing confidence in the market, driven by the vaccine rollout and economies being reopened. In 2020, businesses were focused mainly on survival. Now momentum is building as businesses start to recover and repay loans to banks, governments provide incentives for business spending and growth and funds with capital to spend are looking for opportunities to invest.
Looking ahead, we’re likely to continue seeing some volatility as markets around the world shift and recover from the economic slowdown and market uncertainty. Overall, however, foreign bank activity paints a positive picture of capital flow into Australia. With increased government stimulus, customers embracing digital solutions and Australia offering a relatively stable market, we have high confidence there will be plenty of opportunities ahead.
John Elias is a highly regarded specialist in structured finance and debt capital markets. He has recognised expertise in market-leading finance transactions for domestic and international banks, financial institutions and major corporations.
An extensive career in the professional services industry has enabled me to build a reputation as a leading adviser to major banks and financial institutions in Australia and Canada.
I am the International Managing Partner, with overall responsibility for the firm's relationship with foreign clients, networks and correspondent firms. I have an extensive corporate practice, advising in multiple jurisdictions across industry sectors such as energy, infrastructure, financial services, health and consumer brands.
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