Chinese and Japanese banks lead surge in Australian loans
Stable asset quality lures Chinese and Japanese players as the share of European peers shrinks
Bank of China and Sumitomo Mitsui Banking Corp are leading a surge in loans to Australian companies by lenders from Asia's two biggest economies.
The amount owed to the four biggest Chinese banks in Australia by non-financial corporations jumped 50 per cent in the year to April to A$11.9 billion (HK$86.5 billion), while the equivalent for the three largest Japanese creditors rose 18 per cent to A$28.1 billion, data showed.
The Asian lenders are filling some of the void left by their European peers, whose volumes in Australia have not regained levels seen since before the 2008 financial crisis.
China's banks, expanding overseas to gain the experience they need to compete with global lenders in their domestic market, have boosted loans in Australia by more than 20-fold over six years. Japanese finance providers, flush with low-cost money from the Bank of Japan's stimulus programme, have helped fund companies including Sydney Airport and Newcastle Coal Infrastructure Group.
"Japanese and Chinese lenders will be inspired by the stable asset quality of Australian banks to deploy their funds in the country," said Brett Le Mesurier, an analyst at BBY. "Clearly, the Chinese are deposit-funded and want to diversify their loan book. Japanese are looking for growth."
Sumitomo Mitsui increased its outstanding loans by A$2.49 billion to A$10.5 billion in the 12 months to April, the biggest gain among the Chinese and Japanese banks, the data showed. Bank of China lifted its Australian lending by A$2 billion to A$8 billion over the same period.
