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The banks' international business

The growing internationalisation of the banking business surpasses even the trend towards transactions on the capital markets. The German banks’ business with non-residents has expanded far more rapidly than their business with domestic customers. Foreign lendings, in particular, saw double-digit annual increases over the last five years.

 

    Year-end 2004   Change since year-end 1999
    € bn   as % of balance
sheet total		   € bn   % p.a.
Lending to
domestic banks		   1,075.9   16.1   + 41.80   + 0.8
Lending to
foreign banks		   760.2   11.4   + 424.0   + 16.5
Lending to
domestic
non-banks		   2,646.7   39.7   +59.2   + 0.5
Lending to
foreign
non-banks		   362.5   5.4   + 175.8   + 12.1
Domestic
securities
holdings		   943.9   14.2   + 161.6   + 3.8
Foreign
securities
holdings		   382.5   5.7   + 202.0   + 15.5
Deposits of
domestic banks		   1,080.2   16.2   + 49.3   + 0.9
Deposits of
foreign banks		   603.3   9.1   + 161.7   + 5.9
Deposits of
domestic
non-banks		   2,200.0   33.0   + 297.5   + 3.0
Deposits of
foreign
non-banks		   311.2   4.7   + 77.3   + 5.0

Source: Deutsche Bundesbank

Transactions with the banks’ own foreign branches were the mainspring of cross-border interbank dealings. Business with legally dependent foreign branches rose especially sharply.

But despite the dynamic development of international operations, the focus of the German banks’ activities remains on Germany. Around 78% of assets and 80% of liabilities (allowing for the banks’ bearer debt securities held by non-residents) are vis-à-vis domestic customers.

Private banks
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