The European Banking Authority published two reports on the EU footprint of subsidiaries of non-EU banking groups and on EU and European Economic Area banks’ foreign currency assets, liabilities and funding dependence. The reports show third-country banking group subsidiaries held 9.8% of EU banking sector assets as of December 2024, while EU and EEA banks increased their foreign currency exposures and foreign currency funding over the year. Third-country subsidiaries’ presence was concentrated in specific activities, representing 29% of derivatives, 8% of loans and 6% of debt securities. The overall market share was slightly down from 10.2% in December 2023, driven by reduced shares in loans and derivatives, with the decline most notable for subsidiaries ultimately controlled from the United States and the United Kingdom, while China-linked shares were stable and Japan- and Switzerland-linked shares increased. Subsidiaries reported that around two-thirds of total assets were in products towards credit institutions and other financial corporations, and 86% of reported assets were located outside the jurisdiction where the subsidiary is domiciled; in P&L terms they accounted for 10% of fee and commission income and had particularly high fee shares in commodities (65%) and fiduciary transactions (48%). On foreign currency dependence, EU and EEA banks held nearly 32% of exposures and received 21.1% of total funding in foreign currencies as of December 2024, up from 28.4% and 20.5% in December 2023, with US dollar exposures at 23% of total exposures and US dollar funding at 13.1% of total funding. Unsecured wholesale and repo funding made up more than 75% of foreign currency funding, and the share of US dollar funding rose to 28% for repo funding and 18.3% for unsecured wholesale funding; net stable funding ratio buffers remained above minimum requirements across significant currencies except Norwegian krone and Japanese yen.
European Banking Authority 2025-11-03
European Banking Authority finds third-country bank subsidiaries hold 9.8% of EU assets as foreign currency exposures rise to 32%
The European Banking Authority reports that as of December 2024, third-country subsidiaries held 9.8% of EU banking sector assets, with significant derivatives and loans activity. EU and EEA banks increased foreign currency exposures, mainly in US dollars. US and UK-controlled subsidiaries saw a market share decline, while China remained stable, and Japan and Switzerland increased. Unsecured wholesale and repo funding made up over 75% of foreign currency funding.