Despite the tensions between Australia and China over trade and diplomatic issues, Chinese banks recorded strong growth in resident Australian assets in 2020.
According to Minter Ellison’s 2021 Foreign Bank Tracker, foreign banks maintained their expansion in Australia in 2020, despite the economic impact of COVID-19.
North American banks grew resident Australian assets by 26 per cent, Asian banks grew by 12 per cent and European banks by 7 per cent.
The survey is based on APRA data, which show that the pandemic and increased Foreign Investment Review Board scrutiny only slowed the growth of foreign bank assets in Australia a little.
European banks hold around A$260 billion of resident Australian assets, followed by Asian banks with around $200 billion and North American banks with $130 billion.
Among Asian banks, banks based in countries with strong trading links grew their assets strongly. These counties include China, Japan and Taiwan.
China Everbright increased resident assets by 80 per cent last year and Bank of Communications increased assets by more than 50 per cent.
Japanese bank MUFG is the biggest Asian banks in Australia, followed by Japanese bank SMBC and Bank of China.
Minter Ellison said: “We expect the trend and approach of China’s banks to follow that of their clients, which includes ongoing investment in Australia and continued interest in renewable energy and energy storage
“We also expect a continued interest in industries such as minerals and resources, education, agtech, biomedicine and health.”
Among European banks, ING, HSBC Bank Australia and Rabobank are the biggest European banks in Australia. However, Rabobank suffered a contraction of assets last year, along with Credit Suisse and HSBC.
Société Générale was the fastest growing bank, with a more than threefold increase in asset size. The bank was coming off a low base, having reopened its business here in 2019 after a six-year absence.
Among North American banks, the big players are Citigroup, JP Morgan and Bank of America.
Northern Trust was the fastest growing North American bank, followed by State Street, Paypal and JP Morgan.
Bank of America and BNY Mellon suffered contractions in resident Australian assets last year.