A comparative analysis of the US and EU retail banking markets - Wsbi

In terms of growth of the volume of deposits, for the
period 1992 to 2003, non-bank deposits in the EU
grew on average by 7% a year, equivalent to growth
in interbank deposits (the next biggest form of
liability), though smaller than bonds (10% average
growth over the same period).
Regarding other liabilities, interbank deposits have
similarly remained a relatively constant source of
total bank funds, while bonds and other liabilities
(which include borrowings other than deposits and
bills of exchange) have grown slightly.
Looking at the proportion of deposits (of commercial
and savings banks combined) to GDP, Table 11 shows
that in 1980, the proportion of bank deposits to
total GDP for Continental Europe’s banks amounted
to 65% of GDP, while in 2000 that proportion was
of the order of 93%. In comparison, the equivalent
figures for the UK were 28% and 100%.
5.3.1.2.2 Bank assets
On the asset side, the main and by far most
significant balance sheet items for banks in Europe
were and remained loans for the period 1992-2003.
In 1992, loans made up 48% of total assets,
while in 2003 they represented 47% of total assets.
After loans, interbank deposits represent the largest
assets, though these have been falling as a proportion
of total bank assets over time (see also table M in the
table annex for the figures to graph 12).
Over the period, securities as a proportion of total
bank assets grew from representing 15% to 21%.
Looking at country-specific data reveals that though
loans are indeed the main asset in the great majority
of European bank balance-sheets, the proportion of
securities to total assets is a great deal higher than
the European average in Sweden, Greece, Denmark
and Belgium.
100%
Graph 12: Structure of the assets in the EU, 1992 – 2003 (in %)
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
■ Cash and balance with Central Bank
■ Interbank deposits
■ Loans
■ Securities
■ Other assets
Source: ESBG calculation based on OECD data: “Bank
Profitability”, 2002 & 2004.
In terms of bank loans to the private sector as a
proportion of GDP, the average in 1980 for continental
Europe was 60%, and for the UK it was 27.6%.
In 2000, this proportion had grown to represent an
average across continental Europe of 93.7%, while
for the UK it represented 132% (see table 11).
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