Cross-border lending to emerging market economies rose for the first time in a year during the second quarter of 2016 against a backdrop of overall stagnant international banking activity, according to the Bank for International Settlements (BIS).
International bank lending data from the end of June showed that cross-border claims on borrowers from emerging markets rose by $110 billion to an outstanding stock of $3.3 trillion, partially offsetting a $379 billion decline seen in the previous three quarters.
A $61 billion increase in second quarter lending to China dominated a $70 billion rise in lending to emerging Asia but total claims on China were still down 24 percent year-on-year while claims on emerging markets in Asia were down 15 percent.
Cross-border lending to Latin America and the Caribbean also grew in the second quarter, up by $11 billion, with claims on Mexico and Brazil growing by $6 billion and $4 billion, respectively. BIS said Spanish banks accounted for a substantial share of lending to Brazil.
Lending to Africa and the Middle East also rose in the second quarter – up by $33 billion – pushing the annual growth growth to 12 percent to a record $573 billion in outstanding claims. Most of the loans went to the United Arab Emirates (a rise of $17 billion), Saudi Arabia (up by $9 billion) and Qatar, up by $4 billion.
But overall data for global cross-border credit showed that outstanding claims at the end of June were largely unchanged from June last year at $27.4 trillion, with claims on lenders from advanced economies of $19.7 trillion
Although global cross-border claims were up by $464 billion in the second quarter, intragroup banking activity accounted for most of this increase so BIS said that on a consolidated basis, claims were virtually unchanged.