Foreign banks: Trends and Impact
Stijn Claessens and Neeltje van Horen*
January 2013
Forthcoming in Journal of Money, Credit and Banking
Abstract
Over the past two decades, foreign banks have become much more important in domestic
financial intermediation, heightening the need to understand their behavior. We introduce a
new, comprehensive database, made publicly available, on bank ownership (including the
home country of foreign banks) for 5,324 banks in 137 countries over the period 1995-2009.
We document large increases in foreign bank presence in many countries, but with substantial
heterogeneity in terms of host and banks’ home countries, bilateral investment patterns, and
bank characteristics. In terms of impact, we document that the relation between private credit
and foreign bank presence importantly depends on host country and banks’ characteristics.
Specifically, foreign banks only seem to have a negative impact on credit in low-income
countries, in countries where they have a limited market share, where enforcing contracts is
costly and where credit information is limited available, and when they come from distant
home countries. This shows that accounting for heterogeneity, including bilateral ownership,
is crucial to better understand the implications of foreign bank ownership.
JEL Classification Codes: F21, F23, G21
Keywords: foreign banks, financial globalization, financial sector development, financial
stability, financial crisis.
*
Claessens is with the International Monetary Fund, University of Amsterdam, and CEPR, and Van
Horen is with De Nederlandsche Bank (DNB). This paper was partly written while Van Horen was
visiting the Research Department of the Federal Reserve Bank of Chicago. We would like to thank
Thorsten Beck, David Marques-Ibanez, an anonymous referee, and participants at the DNB-JMCB
conference Post-Crisis Banking for valuable comments. We are grateful to Yiyi Bai,Tugba Gurcanlar,
Matias Gutierrez, Joaquin Mercado, Lindsay Mollineaux, Deimante Morkunaite, Krisztina Orban,
Jeanne Verrier and Chen Yeh for their extensive help with collecting the data and providing excellent
research assistance at various stages of this project. The data collection was started while the authors
were at the World Bank and financial support for this project from the World Bank’s Research
Support Budget and the United Kingdom's Department for International Development (DECRG trade
and services project) is gratefully acknowledged. The database underlying this paper is made available
online at www.dnb.nl\xxxx. While extensive efforts have been undertaken to cross-check information,
we do not accept responsibility for the accuracy of the final data. The views expressed in this paper are
those of the authors and do not necessarily represent those of the institutions with which they are or
have been affiliated. E-mail addresses: [email protected], [email protected].
1.
Introduction
Although interrupted by the recent financial crisis, the past few decades have seen an
unprecedented increase in globalization, especially in financial services. Not only have crossborder bank (and other capital) flows increased dramatically, but also many banks, from both
advanced and developing countries, have ventured abroad and established presence in other
countries. Although there are differences, few countries have been left out from this trend of
increased financial integration.
Given the large importance of foreign banks in many countries today, understanding
the motivations of foreign banks to enter a particular host country, the way by which they do
so, and the impact they have on financial sector development and financial stability has
become essential. These questions have become even more prominent with the financial
crisis. Although much research has been conducted, many questions remain unanswered,
however, partly because of limited data availability. Having access to good data enables
researchers to study trends and allow for heterogeneity of foreign banks, and is therefore
paramount to increasing our understanding of the impact of foreign bank ownership. This is
the main contribution of our paper: introducing a new and comprehensive database on bank
ownership.
Our database (available online at www.dnb.nl\xxxx) covers ownership information of
5,324 banks active in 137 countries over the period 1995-2009. For each year a bank is active
during the sample period, its ownership, domestic or foreign, is determined. When foreign
owned, the home country of the largest foreign shareholder is provided. Compared to other
databases on bank ownership used in the literature (most notably the one constructed by
Micco, Panizza and Yañez, 2007) our database is unique in a number of respects. First, it
includes virtually all banks active in a particular country. Second, it includes countries of all
levels of development. Third, it captures bank ownership and changes therein in a continuous
fashion over an extensive period. Fourth, it includes the home country of the foreign bank.
Together, this comprehensive and detailed database allows for many kinds of new
research. For example, it allows, when linked to financial data such as from Bankscope, for
comparisons between domestic and foreign banks of different types (e.g., small versus large,
old versus young, deposit taking versus non-deposit taking). It allows one to test whether
foreign banks behave differently (also compared to domestic banks) in certain countries, and
to disentangle short-run from long-run determinants and implications of foreign ownership as
well as to control for some factors often omitted. And, since it differentiates between foreign
2
banks from different countries, one can examine the impact of bilateral factors (like distance,
trade linkages, institutional similarity, etc.) on foreign bank entry decisions and behavior.
In the remainder of the paper, we use our database to describe salient facts on the
trends in foreign bank ownership and to study its impact on financial development in the host
country. We document a sharp increase in foreign bank ownership over the period 1995-2009
affecting a large number of countries.1 We show though that much heterogeneity exists with
respect to the relative importance of foreign banks in the host country, the home country of
the parent bank, the bilateral pattern of foreign bank investment, and the business models used
by and performance of foreign banks. Importantly, we show that accounting for this
heterogeneity is crucial when studying the impact of foreign bank ownership. When
examining the link between foreign bank presence and private credit for example, we show
that this depends importantly on host country and foreign bank characteristics. Specifically,
foreign banks only seem to have a negative impact in low-income countries, in countries
where they have a limited market share, where it is costly to enforce contracts and where
credit information is only limited available, and when they come from distant home countries.
The relationship between foreign bank presence and private credit is one example of
the many questions studies have examined regarding the causes and consequences of foreign
bank ownership. Before the crisis, the general consensus was that the benefits of foreign
banks greatly outweigh the costs in many dimensions. It was generally thought that foreign
banks add to domestic competition, increase access to financial services, enhance financial
and economic performance of their borrowers, and bring greater financial stability (Clarke,
Cull, Martinez Peria and Sanchez, 2003; Claessens, 2006; and Cull and Martinez Peria, 2012).
Generally, lower costs of financial intermediation (measured by margins, spreads, overheads)
and lower profitability are found to coincide with greater foreign bank presence (Claessens,
Demirguc-Kunt, and Huizinga, 2001 and studies like Mian, 2003; Berger, Clarke, Cull,
Klapper and Udell, 2005; Beck, Demirguc-Kunt, and Martinez Peria, 2008). Also, evidence
exists of better quality financial intermediation, e.g., lower loan-loss provisioning, with more
foreign entry (Martinez-Peria and Mody, 2004). This is especially so compared to stateowned banks whose performance is generally found to be poor (La Porta, Lopez-de-Silanes,
and Shleifer, 2002; Sapienza, 2004; Cole 2009; Carvalho, 2012). Likely a number of factors
are behind these effects, such as the introduction of new, more diverse products, greater use of
up-to-date technologies, and know-how spillovers (e.g., as people learn new skills from
1
A number of these patterns were documented earlier in Claessens, Van Horen, Gurcanlar and
Mercado (2008).
3
foreign banks, they migrate over time to domestic banks). In addition, foreign banks likely
pressure governments to improve regulation and supervision, increase transparency, and more
generally catalyze domestic reform (Levine, 1996).
The effects of the entry of foreign banks on development and efficiency appear to
depend on some conditions, though. For example, limited general development and entry
barriers can hinder the effectiveness of foreign banks (Garcia-Herrero and Martinez Peria,
2007; Demirguc-Kunt, Laeven and Levine, 2004). Also, the relative size of foreign banks’
presence seems to matter. With more limited entry (relative to the total host banking system),
fewer spillovers seem to arise, suggesting some threshold effect exists (Claessens and Lee,
2003). Furthermore, important interplays seem to exist between similarities of home and host
countries and entry decisions (Berger, Buch, DeLong, and DeYoung, 2004; Galindo, Micco
and Serra 2003; Claessens and Van Horen, 2012a) and between (cultural and institutional)
distance and performance (Claessens and Van Horen, 2012b).
In terms of individual bank characteristics, it seems that larger foreign banks’
operations are associated with greater effects on access to financial services for small and
medium-sized enterprises, perhaps as they are more committed to the market, while smaller
banks are more niche players (Clarke, Cull, Martinez Peria and Sanchez, 2005). Furthermore,
the health of both the home and the local host bank operation seem to matter, with healthier
banks showing better credit growth (Dages, Goldberg and Kinney, 2000; see also De Haas
and Van Lelyveld, 2006).
While the entry of foreign banks is generally thought to have favorable effects on
credit extension, some studies find more ambiguous results. Some show that foreign banks
“cherry pick” borrowers (Detragiache, Gupta and Tressel, 2008; Beck and Martinez Peria,
2010; Gormley, 2010). This can undermine overall access to financial services, since it
worsens the remaining credit pool, and thereby lowers overall financial development,
especially in low-income countries where information asymmetries are large. Indeed,
Detragiache, Gupta, and Tressel (2008) show that the presence of foreign banks in lowincome countries is associated with less credit being extended. However, Cull and Martinez
Peria (2008) show that this relationship disappears or even reverses once crisis-induced
acquisition of (distressed) banks by foreigners is accounted for.
Besides the impact of foreign banks on the development and efficiency of the
domestic financial sector, a number of studies examine their impact on financial stability.
Some papers find that global banks support their foreign affiliates during times of financial
stress through internal capital markets (De Haas and Van Lelyveld, 2006 and 2010; Barba4
Navaretti, Calzolari, Levi, and Pozzolo, 2010). At the same time, however, some studies show
that (funding) shocks to parent banks can be transmitted to their foreign subsidiaries and
branches with (possible) negative consequences for their lending (Peek and Rosengren, 1997,
2000; Cetorelli and Goldberg, 2012). Studying the global financial crisis, papers show that
foreign subsidiaries reduced lending more compared to domestic banks (Popov and Udell,
2012; De Haas and Van Lelyveld, 2011). Ongena, Peydro and Van Horen (2012), however,
show for Eastern European countries that while foreign banks reduced lending more
compared to locally funded domestic banks, they did not compared to domestic banks that had
financed their lending from international capital markets. In addition, Claessens and Van
Horen (2013) find that foreign banks reduced credit more compared to domestic banks in
countries where they had a small role, but not when dominant or funded locally.
Although providing very interesting and valuable insights, most studies analyze only a
limited number of countries and/or a selected number of (large) banks. While this can allow
for a more careful isolation of the mechanisms the authors are after, it can come at the cost of
not being able to generalize the results or to address the influence of heterogeneity across
foreign banks. While many have attempted to control for country factors for example, this has
proven somewhat difficult. Especially bilateral factors have been hard to control for simply
because data have not been available. While some papers have investigated these issues (for
example, Berger, Buch, DeLong, and DeYoung, 2004), only some papers (Galindo, Micco,
and Serra, 2003; Micco, Panizza and Yanez, 2007; Claessens and Van Horen, 2012a,b and
2013) were able to analyze a large sample of banks and control for various types of
heterogeneity.
As we highlight, exploiting the unique information in our database, much
heterogeneity exists within the group of foreign banks and this heterogeneity has a non-trivial
impact on, for example, the relationship between foreign bank presence and private credit
development. Therefore, by introducing this new, comprehensive database covering (close to)
the universe of domestic and foreign banks over a lengthy period, this paper allows research
on foreign banking to be extended in important ways.
The paper itself is structured as follows. Section 2 describes the database. Section 3
provides an overview of the main trends in foreign banking, and highlights the heterogeneity
in foreign bank ownership. Section 4 examines the impact of foreign bank ownership on
private credit in the host country. Section 5 concludes.
5
2.
Data
The main purpose of this paper is to present an original and newly collected database on bank
ownership (available at www.dnb.nl\xxxx). The data in the database were manually collected
using many sources. These include, but are not limited to, (parent) bank websites and annual
reports, banking regulatory agency/Central Bank websites, reports on corporate governance,
local stock exchanges, SEC's Form F-20, newspaper articles and country experts. We further
cross-checked the data with other (less comprehensive databases), among others, Micco,
Panizza and Yañez (2007). Given that, to the best of our knowledge, full coverage of bank
ownership information is not available in other databases, our data collection effort provides a
unique source of information.2
We started off by creating a list of all commercial banks, savings banks, cooperative
banks, bank holdings, and holding companies that were reporting to Bankscope in 2009. We
then included all banks that were active at least one year between 1995 and 2009. Therefore
our database includes both banks still active in 2009 and banks that exited the market during
the sample period. For each bank we provide their consolidated and/or unconsolidated index
number (as used by Bankscope) to allow researchers to combine our ownership data with
balance sheet and profit and loss information. Given that we link our database to Bankscope,
we cover subsidiaries of foreign owned banks, but not their branches, as branches in general
do not report individual balance sheet information and are therefore not included in
Bankscope.
Following this list we imposed a few restrictions. First, we only included host
countries with more than 5 active banks reporting to Bankscope in 2009. In addition, for the
advanced countries in our sample, we restricted our coverage to the 100 largest banks in each
country in terms of 2008 assets, so smaller (typically regional) banks are not included in the
database for these countries (this reduces especially the coverage of the banks active in the
United States). Third, since including bank holding companies can potentially lead to double
counting, as both the holding company and the bank itself are often included in Bankscope,
we excluded the holding company if the bank itself was represented in the database. For all
countries, we cover this way at least 90 percent of the banking system in terms of assets. In
total, the database covers ownership information of 5,324 banks active in 137 countries,
covering banks in advanced countries like the United Kingdom and the United States,
2
Bankscope does provide some information on shareholder structures of banks. However, information
is lacking for a large number of banks and changes over time are in general only partially recorded.
6
emerging markets like Brazil and China, and developing countries like Cambodia and
Zambia.
Next, we proceeded by determining for each bank in our sample the exact moment of
entry and (if applicable) of exit. If the exact year of establishment (“entry”) could not be
determined, but additional information indicated that the bank was in operation prior to 1995
(e.g., the presence of financial statements), we coded 1500 as the fictive year of
establishment. For 47 banks (0.9 percent of our sample) we were not able to find the exact
year of establishment nor could we determine whether the bank was active prior to 1995. In
these cases the year of establishment and ownership information is left blank. In terms of exit,
we used in general the year the bank became inactive in Bankscope as the moment of exit.
When in doubt, we cross-checked this information using additional sources and made
corrections if necessary.
Mergers and acquisitions (M&A) are common among banks, but represent a
complication in data collection and coding. We carefully went through all M&As and made
sure that only the merged entity or the acquiring bank remained in the sample after a takeover. For example, if two banks, bank A and bank B merged in 2000 to create a new entity,
bank C, then the two individual banks A and B were each included in the dataset until 2000.
Then, from 2000 on, these two banks were considered inactive and the new bank (bank C)
was included in the database. Similarly, if bank A was acquired by bank B in 2000, both
banks were included in the database until 2000, with bank A then becoming inactive after
2000 and bank B remaining active after 2000. Information on mergers and acquisitions was
mostly obtained from Bankscope and from banks’ individual websites.3
Subsequently we identified the bank’s shareholders in each year the bank was active in
the period 1995-2009. Given that it is nearly impossible to collect exact shareholder
information and changes therein over time for such a large sample of banks and long period,
we opted for using a dummy approach. That is, we identified a bank as foreign owned when
50 percent or more of its shares were held by foreigners, capturing this way also major
changes in ownership. This cut-off is standard in the literature on foreign bank ownership. For
each year the bank was active, it was then coded either foreign-owned or domestic (note that
for domestic banks we do not make a distinction between privately- or state-owned banks).
3
Although the database does not provide a specific indicator for the occurrence of a merger or
acquisition, were relevant often (detailed) information on the merger or acquisition is provided in
accompanying notes.
7
Next, we determined for the foreign banks the home country of the largest foreign
shareholder. We summed the percentages of shares held by foreigners by country of
residence, with the country with the highest percentage of shares then considered the home
country. The country of ownership is based on direct ownership, i.e., we do not consider
indirect ownership. We did, however, take into account that in some cases the direct owner is
an entity purely established for tax purposes. In such cases, we recorded the country of
nationality of the ultimate owner as the home country (these cases typically involve entities
registered in Luxembourg, Mauritius, and Panama). In later years, identifying home countries
and tracing ownership information became more complicated with more banks raising equity
through public capital markets offerings. To overcome the problem of determining the
nationality of anonymous shareholders, we only considered block shareholdings when
determining ownership. When determining ownership, we erred on the side of caution and
reported ownership as missing when the reliability of the information was in question.
The following is an example how the coding of a hypothetical bank was carried out.
First, let a bank in Hungary be 40 percent domestic owned and 60 percent foreign owned.
Then, let shareholder X from Austria hold all shares not held by domestic owners. This bank
is coded as foreign owned with Austria as the home country. In this case the foreign
shareholder is the largest shareholder. There are cases though in which the foreign
shareholder is not the largest shareholder, but the bank is still foreign owned. An example can
clarify this case. Let a bank in Poland be 40 percent domestic owned and 60 percent foreign
owned. Then, let shareholders X and Y from Germany hold 35 percent of the shares, while a
shareholder Z from Italy holds 25 percent of shares. This bank is then coded as foreign
owned, with Germany as the home country because the largest portion of shares in foreign
hands is held by German investors, even though German investors themselves hold fewer
shares than domestic owners do.
Using these data and procedures, we were able to determine the complete ownership
structure, including the home country of the largest foreign shareholder, for 5,248 of the 5,324
banks in the sample (i.e., 98.6% percent) for all the years each bank was active. For 14 banks
only partial ownership and for 61 banks no ownership could be determined. All in all, the data
provide an almost complete picture of bank ownership around the world and changes therein
over time.
Using the database, we next discuss developments in foreign bank presence between
1995 and 2009, how this varies by home, host and bilateral characteristics, compare foreign
and domestic bank characteristics, and analyze the relationship between foreign bank
8
presence and financial development and how this varies by host country and foreign bank
characteristics.
3.
Trends and heterogeneity in foreign banking
Over the period 1995 to 2009, banking systems in many countries experienced important
transformations. While the total number of domestic and foreign banks in our sample stayed
virtually the same (3,980 in 1995 and 3,947 in 2009), these aggregate numbers mask two
counteracting trends (Table 1).4 The number of domestic banks decreased by about 18
percent, due to consolidation driven by technological changes and deregulation in many
advanced and developing markets as well as by some financial crises. At the same time, the
number of foreign-owned banks increased by 69 percent. These differing trends mean that the
relative importance of foreign banks increased substantially, from a share of 20 percent in
1995 to 34 percent in 2009. Figure 1 shows this steady increase in the number of foreign
banks present, from 788 in 1995 to 1,330 in 2009, and in the foreign share.
While there was a steady increase in presence, foreign bank entry did fluctuate over
the period (Figure 2). It was especially high in the late nineties and early 2000s and again in
2006-2007. This reflected in part waves of reforms, including the opening up of Eastern
Europe and other transition economies, and the liberalization of entry by East Asian countries.
It also reflected the rapid financial globalization that took place before the crisis. Entry peaked
in 2007 though, and slowed down markedly after the start of the crisis. While 2008 still saw
entries at levels similar to 2005, entries in 2009 were the lowest in the period. Many banks in
important home countries suffered capital losses and, due to market forces or government
interventions, were forced to consolidate, limiting their interest in new foreign investments.
At the same time, countries affected by the crisis became less attractive as investment
opportunities.
Although entries dominated over the whole sample period, foreign banks did exit
markets, with 2001 standing out with 47 banks exiting, mostly due to various crises affecting
emerging markets. While the recent crisis negatively affected entry in 2009, it hardly
impacted exits which remained at earlier levels. Parent banks, apparently, did not (yet) feel
the need to close or sell their foreign affiliates, probably because many affiliates were located
4
We exclude from all further analyses 8 offshore host countries (Antigua and Barbuda, Bahrain,
Barbados, Cyprus, Mauritius, Panama, Seychelles and Singapore) that are included in the database.
This reduces the sample by 225 banks.
9
in countries at the time only marginally affected by the crisis and/or with substantial longterm growth opportunities (with fixed costs involved in setting up a foreign affiliate large,
exits are in general not driven by short-run fluctuations but by longer-run opportunities).
While foreign bank presence increased in general, the trends and current penetrations
differ greatly across host countries (see Appendix Table 1 and 2 for individual country data).
Figure 3 shows for 129 countries in our sample the share of foreign banks in terms of numbers
for 1995 and 2009. Two observations stand out.
First, foreign bank penetration increased substantially over the period, but with
important differences across countries. This is also clear from Table 1 which provides
information on foreign bank presence by income group (OECD, other high-income countries,
emerging markets, and developing countries) and region.5 In terms of increases, differences
between income groups are substantial. In OECD and other high-income countries, the
number of foreign banks grew by 38 and 2.5 percent respectively between 1995 and 2009, but
in emerging markets by 74 percent and in developing countries by 113 percent. Especially in
emerging markets and developing countries foreign banks thus became more important, with
market shares of 36 and 45 percent in 2009, respectively, up from 18 and 24 percent in 1995.
In these countries, foreign banks now play important roles in financial intermediation, with
average loan, deposit and profit shares between 42 and 50 percent. Perhaps not surprisingly,
in many OECD countries most financial intermediation remains done by domestic banks, with
average foreign bank loan, deposit and profit shares of about 20 percent.
Within the emerging market and developing country group though, substantial
regional differences exist. Growth rates over this period were by far the highest in Eastern
Europe and Central Asia (225 percent) and at 47 percent foreign bank penetration in this
region is now the second largest. Increases were also large in South Asia (120 percent), but as
the base was very low, penetration in this region remains relatively limited, only 14 percent.
Latin America saw very strong growth early in the period, but after 1999, in the aftermath of
the Argentine and Brazilian crises, many foreign banks exited the region and new entries
5
The OECD group only includes the core OECD countries and other high-income includes all
countries classified as high-income by the World Bank in 2000 but not belonging to OECD. This
implies that current OECD countries like Hungary, Czech Republic, Poland, Slovakia and Korea are
included in the emerging market group. Slovenia, which already was a high-income country in 2000,
is included in the other high-income group. Emerging markets includes all countries that are included
in the Standard and Poor's Emerging Market and Frontier Market indexes and that were not highincome in 2000. All other countries are included in the group developing countries. A number of
countries that were low-income in 2000 but which are now in the Frontier Market Index (Bangladesh,
Cote d'Ivoire, Ghana, Kenya and Zimbabwe) are included in the developing countries group.
10
remained limited until investment picked up again in 2006. Still in Latin America shares went
up considerably, from 25 to 39 percent. Foreign bank penetration in Sub Saharan Africa,
already high in 1995 at 31 percent, in part due to past colonial links, only further rose over the
sample period and in 2009 over 50 percent of the banks active in the region were foreign
owned.
Second, even though foreign banks are now present in almost all countries (in 1995 20
countries did not have any foreign bank present whereas in 2009 only 12 countries do so),
their market shares differ widely across countries, with presence generally negatively related
to the level of development of the host country. Especially in many emerging markets and
developing countries in Eastern Europe and Central Asia, Latin America and Sub-Saharan
Africa do foreign banks now capture at least 50 percent of the domestic banking sector.
Figure 4 shows the relative foreign bank presence across all 129 host countries in
terms of numbers (left panel) and assets (right panel) in 2009, from the top 10 to the bottom
10 countries. It highlights how large differences in market shares are, varying from over 90
percent in the top six host countries to single digit percentages in the bottom 21 host
countries. Similarly, the range of asset shares varies also much. The drop in asset share
though is steeper below the middle range compared to that in the number share. This reflects
that host countries tend to have either many large or few small foreign banks.
Foreign bank ownership does not only differ substantially across host countries, but it
also varies importantly by home country as some countries export more banks than others do.
Table 2 shows that in absolute numbers, not surprisingly, OECD countries export the largest
number of foreign banks, 883 in 2009, and emerging markets and developing countries much
fewer, 268 and 97 respectively. Exports did become less concentrated, however, as
investments from emerging markets and developing countries increased more over time.
While the number of foreign banks owned by OECD home countries increased by 58 percent
over the sample period, those owned by other high-income countries, emerging markets and
developing countries grew by 125, 84 and 102 percent respectively. Although the majority of
parent banks today are still from an OECD country (with a strong concentration in some
countries), 28 percent of foreign banks in 2009 was owned by a bank from an emerging or
developing country.
The rise in foreign banks reflects established investors from the same countries further
increasing the number of banks they own and the entrance of investors from new countries.
While in 1995, 78 home countries were active as foreign investors, in 2009 this increased to
97, mostly due to a growing importance of emerging markets and developing countries as
11
investors. While in 1995, 46 different emerging markets and developing countries owned
foreign banks abroad, by 2009 this number had increased to 59. As a result, foreign ownership
has become less concentrated. In 1995 the five biggest investors (France, Germany, the
Netherlands, the United Kingdom, and the United States) owned 45 percent of all foreign
banks. By 2009, this percentage has dropped to 38 percent.
Figure 5 highlights this large variation in home country origin. It shows (left panel) the
distribution across home countries’ in their share of foreign banks active in 2009 in terms of
numbers. Countries like United Kingdom (10.3 percent), United States (8.5 percent) and
France (7 percent) together represent 25 percent of global foreign bank investment, whereas
countries below the top 30 each have market shares of 1 percent or less. Similarly, asset
shares (right panel) vary from double digits for the top two home countries (United Kingdom
14.8 percent and United States, 11.1 percent) to 1 percent or less for any home country
outside the top 20. Again, the falloff in asset share is steeper than for the number share,
indicating that the top home countries “export” relatively many, large banks, while the rest of
the countries only export a few, smaller banks.
The data assembled provide a unique perspective on foreign bank presence as they
allow for documenting home-host relations. Studying these bilateral patterns highlights
another important heterogeneity: strong income- and region-related patterns. Looking at the
diagonal entries in Table 2 shows that banks from OECD countries tend to invest mostly in
emerging markets or in other OECD countries. And banks from emerging markets tend to
invest in developing countries or emerging markets, while banks from developing countries
tend to invest in other developing countries or emerging markets. So banks seem to seek out
those host countries that are relatively similar in income levels to their home market,
presumably after taking into account competition and profit opportunities. Comparing the top
and bottom panels of Table 2 shows that this pattern has strengthened over time among
developing countries, highlighting the increasing role of South-South investment in foreign
bank ownership, as analyzed by Van Horen (2006).
Furthermore, foreign bank entry also tends to be regionally concentrated (Table 3).
Splitting countries in four broad geographical regions that cut across income groups
(America, Asia, Europe, and Middle East and Africa), we see that both in 1995 and 2009 the
share of foreign banks coming from countries within the region is always more than 50% (the
diagonal in Table 3). The highest intraregional share in 2009 is, maybe surprisingly, found for
Middle East and Africa, more than 70%. In all regions except America, the intraregional share
has increased over time which mirrors the trend towards greater intraregional activity found in
12
trade.6 This pattern may not surprise since research has shown that foreign banks tend to
follow their customers and therefore tend to enter countries with strong trade linkages (e.g.,
Goldberg and Grosse, 1991). In addition, studies have found that banks tend to invest in
countries that are (geographical and/or institutional) close (e.g., Buch and De Long (2004);
Galindo, Micco, and Serra 2003)). Claessens and Van Horen (2012b) show, however, that not
only absolute distances matter but also the distance of competitor countries.
Finally, it is important to realize that foreign banks vary much with respect to their
business models, size and profitability. Some of this heterogeneity is shown in Figures 6a-6f.7
The loan to deposits ratio is a proxy for the degree to which a bank is active in traditional
forms of financial intermediation, i.e., lending. This ratio tends to vary much across foreign
banks (Figure 6a), indicating that some foreign banks are financing their lending mostly from
(local) deposits, while others importantly use additional sources of (wholesale) funding.
Foreign banks also tend to have significant liquid assets relative to total assets (Figure 6b),
reflecting conservative management. The variation is again large, however, as the ratio ranges
between 5 and 80 percent.
In terms of solvency, foreign banks tend to have ratios of capital to risk-weighted
assets similar to domestic banks, which on average hold 18 percent capital (Figure 6c). This
suggests that many foreign banks are also conservative with respect to their capital buffers, as
international guidelines suggest capital adequacy requirements of 8%. Nevertheless, a
substantial number of foreign banks still have relatively low capital ratios. In terms of
performance, foreign banks tend to slightly underperform domestic banks with returns on
assets in general hovering at or below the 2 percent level (Figure 6d). This may surprise since
foreign banks, with greater access to know-how, technology and lower cost of funds, are
generally believed to be quite profitable. Some of this lower profitability probably reflects
foreign banks’ specific activities; for example, they could have more conservative portfolios.
However, it may also reflect differences in the origin of foreign banks and the ease by which
they operate in foreign countries.8
6
As shown by Whalley and Xin (2007), trade has become increasingly more regional over the last
three decades, which they explain by the proliferation of regional free trade agreements.
7
We use 2007 balance sheet information in Figure 6 to avoid results being contaminated by the
financial crisis.
8
Claessens and Van Horen (2012a) show that the profitability of foreign banks is importantly affected
by home, host and institutional factors. They find, for example, that foreign banks perform better when
from a high income country and when regulations in the host country are relatively weak. Also foreign
banks from home countries with the same language and similar regulation as the host country tend to
perform better. These factors explain some of the differences in the simple averages.
13
Figure 6e shows the ratio of deposits to liabilities, which indicates the importance of
wholesale funding relative to traditional deposits. Here large variations also exist, but on
average foreign banks have a deposit to liability ratio of about 73 percent, the same as
domestic banks. Finally, Figure 6f shows how most foreign banks represent only a small share
of total banking system assets in respective host markets, with shares generally less than 10
percent. As noted, however, some individual foreign banks are significant in local banking
systems, in some cases with shares over 30 percent.
Summarizing, our data show not only that foreign banks have become much more
important over the last two decades in many countries’ banking systems, but also that there is
much heterogeneity in investment patterns. In the next section, we examine, taking this
heterogeneity into account, one prominent and controversial question: the impact of foreign
bank ownership on the provision of credit.
4.
Foreign banks and domestic credit creation
In this section we examine the link between foreign ownership and the provision of credit to
the private sector. The extent to which foreign banks contribute to financial sector
development is possibly one of the most controversial aspects of foreign bank presence.
Although some studies have looked at the relationship between private credit and foreign
bank ownership, surprisingly little is known under what conditions foreign ownership
positively relates to private credit and when negatively. The recent financial crisis has given
further impetus to this question. Given the substantial differences across foreign banks, as
highlighted, allowing for various types of heterogeneity can be important when studying this
issue.
Methodology
To assess the impact of foreign bank ownership, we use cross-country regression
analyses to test whether foreign bank presence is associated with higher or lower levels of
private credit and which host country and bank characteristics may drive this relationship.
Detragiache, Gupta and Tressel (2008) develop a theoretical model that predicts a negative
relationship between foreign bank presence and private credit for low-income countries.
Studying a sample of 89 low- and lower-middle income countries, they find that foreign bank
presence is indeed negatively related to private credit. Since they did not include other
countries, however, the generality of this result is not obvious. And, as is true for many cross14
country studies, it may be due to other, omitted factors. Our sample consists of 111 countries
for which we have information on foreign bank presence and private credit, allowing us to
examine the robustness of this finding to a number of host country characteristics.
Furthermore, as the database includes the identity of the home country of the foreign bank, we
can study whether the effects vary by foreign bank home country.
Our dependent variable is the ratio of private credit to GDP (from the IMF
International Financial Statistics). We take the 3-year average (2005-2007) to smooth out
business cycle fluctuations. Our independent variable of interest, Foreign presence, is the
ratio of foreign bank assets to total bank assets in the country, measured as of 2004 to limit as
much as possible endogeneity concerns.9
As control variables, we add a number of variables known to affect the level of private
credit in an economy (see, for example, Djankov, McLiesh and Shleifer 2007), all also
measured as of 2004. The first variable is the overall level of development in the country as
measured by GDP per capita, with more developed countries having generally a higher level
of private credit. We control for Inflation as it has been shown to adversely affect financial
depth. In addition, we include two variables capturing host countries' institutional quality as
related to the ease of doing banking business: the availability of information to creditors
(Creditor info), and the cost of enforcing contracts (Enforcement contracts). Both these
variables come from the World Bank’s Doing Business indicators.
The obvious drawback of this type of cross-sectional regression is that the market
share of foreign banks could be endogenous to the host country’s financial development,
including private credit. As also pointed out by Detragiache, Gupta and Tressel (2008) the
bias could, however, run both ways. On the one hand, foreign banks might be more willing to
enter countries where (for other reasons) financial development is particularly low as they
expect these markets to grow faster. On the other hand, business prospects might be worse in
countries with low levels of development, making foreign banks more reluctant to enter. As
the bias is thus not obvious, we continue using OLS regressions with robust standard errors.
Empirical results
Table 4 presents the results of our cross-country regression. Using all 111 countries in
our sample, we find a negative correlation between the presence of foreign banks and private
credit to GDP (column 1). A one standard deviation increase in Foreign presence is
9
When asset information is too limited in a particular country in 2004 to get a reliable estimate for
Foreign presence we use the 2005 asset share instead.
15
associated with a decline in private credit of 5 percentage points, economically significant,
since the average ratio of private credit to GDP in our sample is 50 percent. We also find
some evidence of a non-linear relationship (column 2). This, however, is mostly driven by a
few outliers: high-income countries with very large financial sectors compared to the size of
their economy that are either dominated by foreign banks (Hong Kong, Ireland and New
Zealand) or with hardly any foreign banks (Iceland). When we exclude these countries, we
find again a negative (linear) relation that is even stronger (not reported).
In terms of our control variables, we find (as expected) GDP per capita to be generally
positively associated with more financial development and inflation with less financial
development. Access to creditor information has a positive impact on financial sector
development, but is imprecisely estimated. In general, the longer it takes for contracts to be
enforced, the less credit is created, but this effect is often also imprecisely estimated.
In order to test whether the relationship between foreign bank presence and the
provision of private credit is conditional on certain host country features, we next study a
number of subsamples of host countries. First, we test whether the impact of foreign bank
presence differs between the group of developing countries, emerging markets, and highincome countries. The results in Table 4 column 3-5 show that this is indeed the case. We find
that foreign bank presence is only negatively related to private credit in developing countries.
A one standard deviation increase in Foreign presence is associated with a decline in private
credit of 5 percentage points (compared to a mean private credit to GDP ratio of 20 percent in
this group of countries). This confirms the results of Detragiache, Gupta and Tressel (2008)
that for low-income countries foreign bank presence is negatively related with private credit.
Second, we look at the relative importance of foreign banks in the host country. A
number of studies have found evidence that the behavior of foreign banks might be related to
their relative importance in the host country. For example, Claessens and Lee (2003) find
fewer spillovers with more limited entry. And Cull and Martinez Peria (2008) show that in
countries where foreign banks hold more than 10 percent of the assets, private credit was
significantly higher than in countries with shares less than 10 percent before, during and after
crises. Since the relative importance of foreign bank presence varies a lot across the countries
in our sample, we can test the existence of such a threshold effect as well. We split our sample
between countries where foreign banks control less than half of the assets and countries in
which they hold more than half. The results in the next two columns (6 and 7) show that the
negative relation between foreign bank presence and private credit is driven by countries
where foreign banks control less than half the assets. This suggests that in countries where
16
foreign banks are small, maybe as they enter through greenfield investments, they tend to
remain a niche player, targeting only specific customers and not adding to domestic financial
development. In contrast, in countries with greater presence, foreign banks seem to engage
more in financial intermediation.
Third, we investigate whether institutional characteristics known to affect the level of
private credit in an economy drive the relationships. We therefore split our sample between
countries where the costs of contract enforcement are high (above median costs in our
sample) and where they are low (below median), and between countries where credit
information is low (below median) and where it is high (above median). We find that the
general negative relationship between private credit and foreign bank presence for emerging
markets and developing countries seems at least in part driven by those countries with high
costs of contract enforcement and with low credit information (column 8-11). These
regression results suggest it is important to allow for various types of country heterogeneity
when studying the effects of foreign bank presence.
We also want to investigate whether foreign bank characteristics affect the relationship
between foreign bank presence and private credit. Specifically, we test whether the distance of
the parent bank to the host country affects the relationship between foreign bank presence and
the provision of credit. Both theoretical (e.g., Hauswald and Marquez, 2006) and empirical
studies (e.g., Berger and DeYoung, 2001, 2006; Mian, 2006) suggest that foreign banks that
are closer to the host country are better equipped to provide loans as they can better process
soft information. Furthermore, the farther soft information is transmitted within the bank, the
less useful it becomes for making decisions as its quality deteriorates (for theory, see Aghion
and Tirole, 1997; and Stein, 2002; and for empirical evidence, see Berger, Miller, Petersen,
Rajan and Stein, 2005; Liberti 2005; and Liberti and Mian, 2009).
Therefore, one would expect the provision of credit to be more likely positively
correlated to foreign bank presence when banks from nearby countries have entered. To test
whether this is indeed the case, we interact Foreign presence with a variable that indicates
whether foreign banks active in a country are relatively close or distant. This variable, Distant
banks, is calculated for each host country as the (asset share-weighted) average geographical
distance between the host and home country of all foreign banks active in the country.
Table 5 column 1 shows that foreign bank presence in emerging markets and
developing countries is only negatively related to private credit when foreign banks are
relatively distant, as the foreign bank presence variable itself is now actually positive (but not
17
significant), while the interaction variable is statistically significant negative.10 This is in line
with theoretical and empirical evidence that suggests that distance makes it harder for foreign
banks to extend credit. It also suggests that the finding of Detragiache, Tressel and Gupta
(2008) that in low-income countries foreign banks hurt private credit availability may be
importantly driven by the distance foreign banks have to the host country.
We next explore whether the impact on private credit of the relative distance of the
foreign banks active in the country matters as well in regards to the other host country
characteristics we studied in Table 4: the relative presence of foreign banks, the costs of
enforcement, and the quality of credit information. The results (column 2-4) show that, once
we control for the relative distance of the foreign banks active in the country, the impacts of
foreign bank presence for these subsamples are no longer statistically significant negative.
This suggest that the negative relationships between foreign bank presence and private credit
we found in Table 4 for the same subsamples are at least in part driven by the distance of the
foreign banks to the host country (even though the interaction variable itself is not statistically
significant). Although one has to be careful to make any inferences about the direction of
causality, these results suggest that it is not so much the level of development or the
institutional environment of the host country that matters, but rather the fact that foreign
banks that are more remote tend to enter countries with such characteristics. And this large
distance between home and host country in turn might make foreign banks engage in creamskimming activities, which then negatively affects overall credit developments.
5.
Conclusions
The potential benefits and risks of foreign bank presence have been studied for some time.
Still, little is known why foreign banks enter some markets and not others, and how this
relates to home and host country factors, including bilateral aspects. In terms of impact,
questions exist on whether and if so how foreign banks improve the efficiency of domestic
financial systems, increase financial sector development and access to financial services, and
enhance countries’ overall economic growth. Furthermore, the crisis has highlighted that there
can be risks associated with cross-border banking and foreign bank presence. These
developments have led to an increased interest among academics and demand among policy
10
We take both emerging markets and developing countries together in this regression as otherwise
the sample would be too small to do meaningful interactions. However, when running the same
regression on both country groups separately the results are qualitatively the same, except that the
interaction variable is just insignificant (p-value of 0.14 in both cases)
18
makers for more analyses on the benefits and risks of foreign bank presence, also relative to
other forms of international financial integration, to help guide regulatory reforms.
Research and policy questions being asked include: for which types of countries and
under which circumstances do foreign banks add the most to domestic financial sector
development; given that the impact of foreign ownership may be less advantageous for
countries with a certain characteristics, which institutions are most important to improve when
having greater foreign bank presence; when does the presence of foreign banks help mitigate
the effects of various shocks on host countries’ banking systems and when do they not; do
differences between types of foreign banks – country of origin, size, degree of international
operations, distance between home and host countries etc. – and the relative presence of
foreign banks affect their roles in financial sector development and as risk absorbers or
amplifiers; and what balance sheets and performance indicators are most important to monitor
for assessing foreign banks’ role in domestic financial intermediation?
These and other issues will be well served by more in-depth research that in turn can
enhance policy recommendations on how to appropriately regulate foreign banks and adjust
institutional environments. The database documented and analyzed in this paper can help with
research on these topics. It shows that in many countries foreign banks have become an
important part of the local banking system, but also that a lot of heterogeneity exists among
foreign banks with respect to a number of dimensions. At the same time, it makes clear that
the impact of foreign banks on financial development importantly depends on host country
and bank characteristics such as distance. As such, the paper highlights that when conducting
research on foreign banks it is very important to take this heterogeneity into account.
19
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Table 1
Number of Banks by Host Country, Aggregates by Income Level and Region
1995
Number Share
2000
Number Share
2005
Number Share
2009
Number Share
All countries
Domestic
Foreign
Total
3,192
788
3,980
0.80
0.20
1
3,064
1,069
4,133
0.74
0.26
1
2,861
1,165
4,026
0.71
0.29
1
2,617
1,330
3,947
0.66
0.34
1
Domestic
Foreign
Total
1,067
238
1,305
0.82
0.18
1
1,092
280
1,372
0.80
0.20
1
1,102
311
1,413
0.78
0.22
1
1,068
329
1,397
0.76
0.24
1
Domestic
Foreign
Total
79
40
119
0.66
0.34
1
74
38
112
0.66
0.34
1
63
42
105
0.60
0.40
1
62
41
103
0.60
0.40
1
Domestic
Foreign
Total
1,484
328
1,812
0.82
0.18
1
1,313
473
1,786
0.74
0.26
1
1,159
486
1,645
0.70
0.30
1
1,011
572
1,583
0.64
0.36
1
Domestic
Foreign
Total
562
182
744
0.76
0.24
1
585
278
863
0.68
0.32
1
537
326
863
0.62
0.38
1
476
388
864
0.55
0.45
1
Domestic
Foreign
Total
Eastern Europe and Central Asia
Domestic
Foreign
Total
Latin America and Caribbean
Domestic
Foreign
Total
Middle East and North Africa
Domestic
Foreign
Total
South Asia
Domestic
Foreign
Total
Sub Saharan Africa
Domestic
Foreign
Total
261
56
317
0.82
0.18
1
277
64
341
0.81
0.19
1
296
68
364
0.81
0.19
1
290
93
383
0.76
0.24
1
673
115
788
0.85
0.15
1
610
235
845
0.72
0.28
1
510
310
820
0.62
0.38
1
418
374
792
0.53
0.47
1
604
197
801
0.75
0.25
1
485
254
739
0.66
0.34
1
400
215
615
0.65
0.35
1
369
233
602
0.61
0.39
1
147
32
179
0.82
0.18
1
135
40
175
0.77
0.23
1
120
46
166
0.72
0.28
1
103
57
160
0.64
0.36
1
134
10
144
0.93
0.07
1
144
15
159
0.91
0.09
1
149
15
164
0.91
0.09
1
141
22
163
0.87
0.13
1
227
100
327
0.69
0.31
1
247
143
390
0.63
0.37
1
221
158
379
0.58
0.42
1
166
181
347
0.48
0.52
1
Income groups
OECD
Other high-income
Emerging markets
Developing countries
Region
East Asia and Pacific
Note: OECD includes all core OECD countries. Other high-income countries includes all countries classified as high-income by the World Bank in
2000 but not belonging to the OECD. Emerging markets includes all countries that are included in the Standard and Poor’s Emerging Market and
Frontier Markets indexes and that were not high-income countries in 2000. Developing countries includes all other countries. The regions represent the
regional classification as used by the World Bank.
Table 2
Number and Share of Foreign Banks from Home to Host Income Groups, 1995 and 2009
Number and share of foreign banks from
home country present in host country
Home income group
OECD
Other high-income
Emerging markets
Developing countries
Number and share of foreign banks from
home country present in host country
Home income group
OECD
Other high-income
Emerging markets
Developing countries
OECD
Nr. Share
197
9
28
4
0.35
0.29
0.19
0.08
OECD
Nr. Share
272
10
40
7
0.31
0.14
0.15
0.07
1995
Host income group
OHI
EM
Nr. Share Nr. Share
24
0
13
3
0.04
0.00
0.09
0.06
246
14
52
15
0.44
0.45
0.36
0.31
2009
Host income group
OHI
EM
Nr. Share Nr. Share
18
4
17
2
0.02
0.06
0.06
0.02
413
38
94
25
0.47
0.54
0.35
0.26
DEV
Nr. Share
93
8
52
26
0.17
0.26
0.36
0.54
DEV
Nr. Share
180
18
117
63
0.20
0.26
0.44
0.65
Total
Nr. Share
560
31
145
48
1
1
1
1
Total
Nr. Share
883
70
268
97
1
1
1
1
Note: OECD includes all core OECD countries. Other high-income countries includes all countries classified as high-income by the World Bank in
2000 but not belonging to the OECD. Emerging markets includes all countries that are included in the Standard and Poor’s Emerging Market and
Frontier Markets indexes and that were not high-income countries in 2000. Developing countries includes all other countries.
Table 3
Number and Share of Foreign Banks from Home to Host Regions, 1995 and 2009
Number and share of foreign banks
from home country present in host
country
Home region
AMERICA
ASIA
EUR
MEA
Number and share of foreign banks
from home country present in host
country
Home region
AMERICA
ASIA
EUR
MEA
AMERICA
Nr. Share
116
15
93
2
0.61
0.16
0.22
0.03
AMERICA
Nr. Share
128
22
121
4
0.58
0.17
0.15
0.02
1995
Host region
ASIA
EUR
Nr. Share Nr. Share
23
52
37
4
0.12
0.57
0.09
0.05
40
15
235
17
0.21
0.16
0.55
0.22
2009
Host region
ASIA
EUR
Nr. Share Nr. Share
24
83
61
11
0.11
0.63
0.08
0.06
56
19
522
32
0.25
0.14
0.66
0.18
MEA
Nr. Share
10
9
62
54
0.05
0.10
0.15
0.70
MEA
Nr. Share
12
8
85
130
0.05
0.06
0.11
0.73
Total
Nr.
Share
189
91
427
77
Nr.
1
1
1
1
Total
Share
220
132
789
177
1
1
1
1
Note: Countries are grouped in four geographical regions irrespective of the income level of the countries. "America" includes Canada, United States
and all countries in Latin American and the Caribbean, "Asia" includes all countries in Central, East and South Asia and the Pacific countries including
Japan, Australia and New Zealand. "Europe" includes all Western and Eastern European countries "MEA" includes all countries in the Middle East and
North and Sub-Saharan Africa.
Table 4
Private Credit and Foreign Bank Presence - Host Country Heterogeneity
[1]
Foreign presence
Foreign presence - squared
GDP per capita
Inflation
Creditor info
Enforcement
Constant
Nr. of obs.
R2
[2]
All countries
-0.174** -0.635**
(0.018)
(0.028)
0.511*
(0.070)
0.000*** 0.000***
(0.000)
(0.000)
-0.007*** -0.006***
(0.000)
(0.001)
0.022
0.027*
(0.175)
(0.100)
-0.000
-0.000
(0.592)
(0.913)
0.239*** 0.262***
(0.000)
(0.000)
111
111
0.640
0.647
[3]
[4]
[5]
Emerging
markets
-0.041
(0.723)
High
income
countries
0.136
(0.604)
[6]
Foreign
banks <
50%
market
share
-0.288*
(0.057)
[7]
Foreign
banks >
50%
market
share
-0.071
(0.674)
Developing
countries
-0.155***
(0.003)
0.000
(0.778)
-0.004***
(0.001)
0.028**
(0.011)
-0.001**
(0.044)
0.259***
(0.000)
46
0.462
0.000
(0.891)
-0.025***
(0.000)
-0.010
(0.605)
-0.002**
(0.022)
0.664***
(0.000)
39
0.267
0.000
(0.913)
0.062
(0.392)
0.106
(0.280)
0.009
(0.646)
0.297
(0.718)
26
0.089
0.000***
(0.000)
-0.009***
(0.001)
0.037*
(0.099)
-0.001
(0.410)
0.302***
(0.000)
76
0.577
0.000***
(0.000)
-0.004
(0.258)
-0.017
(0.204)
0.001
(0.341)
0.072
(0.649)
35
0.878
[8]
[9]
Cost contract Cost contract
enforcement enforcement
high
low
-0.246*
-0.110*
(0.096)
(0.080)
0.000***
(0.000)
-0.007*
(0.082)
-0.026
(0.711)
-0.000
(0.987)
0.426
(0.266)
57
0.608
0.000
(0.122)
-0.004
(0.161)
0.043**
(0.028)
-0.001***
(0.001)
0.291***
(0.000)
54
0.396
[10]
[11]
Credit
Credit
information information
low
high
-0.209**
-0.127
(0.010)
(0.377)
0.000***
(0.001)
-0.005***
(0.005)
0.006
(0.715)
-0.001
(0.148)
0.301***
(0.000)
56
0.629
0.000***
(0.000)
-0.020*
(0.056)
0.026
(0.357)
0.013
(0.444)
0.040
(0.911)
55
0.572
Note: The table reports the results of a cross-section regression over a sample of 111 countries. The dependent variable is private credit to GDP averaged over the period 2005-2007. Foreign presence equals the assets held by
foreign banks as a share of total assets in the country. GDP per capita is GDP in US dollars divided by the population. Inflation is the log difference in the consumer price index. Creditor information captures the availability to
banks of credit information about borrowers and Enforcement measures the costs that have to be made to enforce a basic business contract as a percentage of the debt value. All regressors are based on 2004 values. Regression in
column [3], [4] and [5] include only countries that we categorized as developing countries, emerging markets and high-income countries, respectively. For exact categorization see main text. In column [6] only countries are include
where foreign banks hold less than 50 percent of the assets in the domestic banking system and in column [7] only those countries in which they hold more than 50 percent. In column [8] only countries are included in which the
cost of contract enforcement is above the median value in our sample of countries and in column [8] only those countries are included with below median level of enforement cost. In column [10] only countries are included with
the level of available credit information below the median level of our sample of countries and in column [11] only those countries that are above the median level. The model is estimated using OLS and the standard errors are
robust. Robust p-values appear in parentheses and ***, **, * correspond to the one, five and ten percent level of significance, respectively
Table 5
Private Credit and Foreign Bank Presence - Distance
Foreign presence
Foreign presence * Distant banks
GDP per capita
Inflation
Creditor info
Enforcement contracts
Constant
Nr. of obs.
R2
[1]
[2]
Emerging markets
and developing
Foreign banks <
countries
50% market share
0.343
0.632
(0.205)
(0.376)
-0.067**
-0.128
(0.048)
(0.177)
0.000*
0.000***
(0.078)
(0.000)
-0.006***
-0.008***
(0.001)
(0.001)
0.021*
0.046**
(0.078)
(0.046)
-0.001**
-0.000
(0.015)
(0.674)
0.323***
0.276***
(0.000)
(0.000)
85
76
0.393
0.584
[3]
[4]
Cost contract
enforcement high
-0.554
(0.372)
0.043
(0.617)
0.000***
(0.000)
-0.007*
(0.082)
-0.028
(0.691)
-0.000
(0.939)
0.442
(0.248)
57
0.609
Credit information
low
-0.221
(0.398)
0.002
(0.965)
0.000***
(0.001)
-0.005***
(0.005)
0.006
(0.720)
-0.001
(0.157)
0.301***
(0.000)
56
0.629
Note: The table reports the results of a cross-section regression over different samples of 111 countries. The dependent variable is private credit to GDP
averaged over the period 2005-2007. Foreign presence equals the assets held by foreign banks as a share of total assets in the country. GDP per capita is
GDP in US dollars divided by the population. Distant banks equals the (asset share-weighted) average geographical distance between the host country
and the home country of all foreign banks active in the host country Inflation is the log difference in the consumer price index. Creditor information
captures the availability to banks of credit information about borrowers and Enforcement measures the costs that have to be made to enforce a basic
business contract as a percentage of the debt value. All regressors are based on 2004 values. The regression in column [1] includes only countries that
we categorized as developing countries or emerging markets. For exact categorization see main text. In column [2] only countries are include where
foreign banks hold less than 50 percent of the assets in the domestic banking system. In column [3] only countries are included in which the cost of
contract enforcement is above the median value in our full sample of (111) countries and in column [4] only countries are included with the level of
available credit information below the median level The model is estimated using OLS and the standard errors are robust. Robust p-values appear in
Figure 1
Number and Share of Foreign Banks, 1995 - 2009
Numbers
Share
1600
0.40
1400
0.35
1200
1000
0.30
800
0.25
600
400
0.20
200
0
0.15
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Number of foreign banks
Share of foreign banks
Figure 2
Number of Entries and Exits of Foreign Banks, 1995 - 2009
Numbers
140
120
100
80
60
40
20
0
-20
-40
-60
NA
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Entry
Exit
Note: As the database starts in 1995 the number of foreign banks that exited the market in that year cannot be determined.
Figure 3
Foreign Bank Presence, 1995 and 2009
Figure 4
Foreign Bank Presence by Top Host Countries, 2009
Top 10 countries
Top 10 countries
11-20
11-20
21-30
21-30
31-40
31-40
41-50
41-50
51-60
51-60
61-70
61-70
71-80
71-80
81-90
81-90
91-100
91-100
101-110
111-120
101-110
121-129
111-115
0
10 20 30 40 50 60 70 80 90 100
Share in numbers (%)
excludes outside values
0
10 20 30 40 50 60 70 80 90 100
Share in assets (%)
excludes outside values
Note: The figure ranks all host countries by the share of foreign banks in the domestic banking system in terms of numbers (left pane)
and assets (right pane) as of 2009. For each group of ten host countries it shows the median, quartiles and minum and maximum
Figure 5
Foreign Bank Exports by Top Home Countries, 2009
Top 10 countries
Top 10 countries
11-20
11-20
21-30
21-30
31-40
31-40
41-50
41-50
51-60
51-60
61-70
61-70
71-80
71-80
81-90
81-90
91-97
91-92
0
1
2
3
4
5
6
7
8
Share in numbers (%)
excludes outside values
9
10
0
2
4
6
8
10
12
14
Share in assets (%)
excludes outside values
Note: The figure ranks all home countries by the share of foreign banks from that country in total foreign banks active in
terms of numbers (left pane) and assets (right pane) as of 2009. For each group of ten home countries it shows the median,
quartiles and minum and maximum
16
Figure 6
Balance Sheet and Performance Measures of Foreign Banks, 2007
.2
Fraction
.1
0
0
.1
Fraction
.2
.3
Fig b. Liquidity ratio
.3
Fig a. Loans-to-deposits
0
.5
1
t
1.5
d
e
l p
_ m
2
2.5
0
.2
.4
.6
q
il _
m
.8
.3
Fraction
.2
.1
0
0
.1
Fraction
.2
.3
.4
Fig d. ROA
.4
Fig c. Capital ratio
0
.2
c a
p _
m
.4
.6
.8
-.02
0
.02
r
a _
o
m
.04
.06
.08
.6
Fraction
.4
0
0
.2
.1
Fraction
.2
.3
.8
Fig f. Foreign banks share in assets
.4
Fig e. Deposits-to-Liabilities
.4
.6
d _
lm
.8
1
0
.2
s h
a re h
_ ta
.4
.6
Note: The vertical red lines represent the averages across domestic banks. Loans to deposits equals total loans to deposits.
Liquidity ratio measures liquid assets divided by total assets. Capital ratio equals the capital divided by risk-weighted assets.
ROA measures return on assets. Deposits to liabilities equals deposits divided by liabilities. Foreign bank share in assets
equals total assets of a foreign bank divided by total assets in the banking system of the country in which the bank is located.
All balance sheet and performance measures are measured in 2007.
Appendix Table 1 - Percentage of Foreign Banks among Total Banks, by Country
Country
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
EAP
Cambodia
China
Indonesia
Korea Rep.
Malaysia
Mongolia
Philippines
Thailand
Vietnam
18
25
13
24
0
26
0
12
5
11
18
22
13
26
0
25
0
15
5
10
17
22
11
26
0
25
0
15
0
10
17
33
9
27
0
24
0
16
6
10
19
33
9
30
0
25
0
17
18
10
19
44
9
31
0
26
0
17
18
10
19
40
8
29
6
32
14
16
18
10
18
33
8
32
7
30
14
14
17
9
18
33
7
30
13
30
14
12
17
12
18
33
7
31
19
30
14
14
17
12
19
38
6
34
19
31
14
14
15
12
18
36
6
36
19
33
13
14
15
9
23
43
15
48
19
33
13
15
14
9
24
43
17
48
19
33
13
15
19
9
24
43
18
49
19
33
13
13
19
9
ECA
Albania
Armenia
Azerbaijan
Belarus
Bosnia-Herzegovina
Bulgaria
Croatia
Czech Republic
Estonia
Georgia
Hungary
Kazakhstan
Kyrgyzstan
Latvia
Lithuania
Macedonia
Moldova
Poland
Romania
Russia
Slovakia
Turkey
Ukraine
Uzbekistan
15
25
17
5
11
11
22
6
38
8
0
67
20
50
13
0
0
8
30
19
7
3
39
13
4
20
17
40
17
10
15
17
28
13
38
8
0
68
15
20
17
0
15
8
38
21
7
3
42
13
4
27
19
50
17
10
14
20
31
18
38
8
0
73
29
43
27
0
15
21
44
32
8
3
40
12
9
25
22
63
23
14
14
17
36
23
42
11
0
74
38
43
29
9
15
27
52
39
9
3
40
14
12
23
25
63
29
14
14
21
46
28
52
29
15
78
35
38
32
18
21
31
61
45
9
6
41
15
13
23
28
75
29
14
27
27
44
31
52
43
21
78
33
38
29
50
36
31
62
57
9
9
55
15
15
21
30
75
36
14
29
43
48
33
54
43
15
81
34
38
27
56
38
31
66
57
9
17
67
15
17
20
32
75
38
10
32
45
54
33
54
43
15
79
34
38
32
67
38
31
69
63
11
18
83
20
19
20
33
70
38
10
36
43
57
26
57
43
21
83
31
50
32
67
44
31
69
70
12
26
89
21
18
20
35
73
43
10
36
44
57
28
57
57
21
85
31
63
41
67
44
31
69
70
13
30
89
21
22
19
38
82
50
10
43
52
61
32
55
71
31
85
32
63
45
67
47
31
75
74
14
39
89
24
27
18
41
77
64
10
43
52
67
35
64
71
50
90
36
63
50
67
50
38
71
81
15
53
88
35
32
18
45
85
64
14
50
58
67
43
68
71
58
93
39
63
57
70
64
41
71
85
17
65
88
41
39
24
47
83
69
14
55
57
67
43
71
71
67
93
39
63
62
70
71
41
70
81
19
63
88
41
44
24
47
83
75
14
55
57
67
43
71
71
67
92
39
63
62
70
71
44
71
81
19
61
87
41
46
24
LAC
Antigua & Barbuda
Argentina
Barbados
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Rep.
Ecuador
El Salvador
Guatamala
Haiti
Honduras
Jamaica
Mexico
Nicaragua
Panama
Paraguay
28
14
22
50
27
22
47
20
13
0
5
18
18
11
0
19
30
32
17
64
52
30
13
24
50
27
24
47
23
13
0
5
17
25
11
0
19
30
38
17
64
55
33
13
29
50
29
28
48
27
13
0
5
18
46
17
0
22
30
44
33
63
52
34
13
32
50
42
31
47
29
15
0
5
18
46
17
0
22
30
44
33
61
59
36
13
37
50
45
33
50
28
19
0
4
22
46
20
0
22
33
43
36
60
62
36
13
37
50
45
34
50
29
18
0
4
23
54
21
0
26
33
49
50
59
60
37
13
37
50
45
34
46
29
20
0
6
18
58
21
0
30
50
48
57
58
63
38
22
34
50
45
34
44
29
20
0
9
15
58
21
0
35
63
56
50
62
65
38
22
36
80
45
35
44
25
20
0
11
15
58
23
0
35
63
56
50
62
62
38
22
35
100
45
35
39
23
20
0
12
15
58
22
0
41
71
54
50
62
62
38
22
34
100
45
34
41
24
21
0
12
15
64
23
0
41
71
50
40
62
62
39
22
34
100
40
35
41
28
20
0
10
15
82
26
0
41
71
47
67
62
62
41
33
35
100
40
37
48
28
21
0
10
15
90
36
0
58
71
46
67
63
64
42
33
35
100
40
38
48
28
18
0
10
15
90
41
0
56
71
48
83
65
64
42
33
35
100
40
38
48
28
18
0
10
19
90
41
0
56
71
48
83
66
62
Serbia & Montenegro
Appendix Table 1 cont'd - Percentage of Foreign Banks among Total Banks, by Country
Country
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Peru
Trinidad & Tobago
Uruguay
Venezuela
33
43
77
10
39
43
77
15
42
50
77
16
48
44
74
25
50
44
74
25
59
44
73
25
63
44
76
24
63
44
80
28
60
44
78
22
60
44
77
24
57
56
77
26
60
56
81
26
63
56
81
24
63
67
81
26
63
67
81
22
MENA
Algeria
Bahrain
Egypt
Iran
Jordan
Lebanon
Libya
Morocco
Oman
Saudi Arabia
Tunisia
Yemen
20
14
63
6
0
11
28
0
33
0
0
36
0
20
14
63
6
0
10
28
0
33
0
0
36
0
20
14
63
9
0
10
29
0
29
0
0
33
0
22
25
56
13
0
10
31
0
36
0
0
33
0
22
22
56
16
0
10
30
0
36
0
0
33
0
24
42
56
16
0
10
33
0
36
0
0
38
0
24
42
50
19
0
10
33
0
36
0
0
38
0
25
47
50
19
0
10
34
0
31
0
0
44
0
27
53
56
19
0
10
34
0
36
0
0
44
0
28
53
64
19
0
20
32
0
40
0
0
44
0
30
57
58
21
0
30
34
0
36
0
0
50
0
34
57
58
44
0
30
35
0
40
0
0
50
0
37
64
57
52
0
30
40
0
40
0
0
50
0
37
64
60
52
0
40
38
0
40
0
0
50
0
38
64
60
52
0
40
38
0
50
0
0
50
0
OHI
Cyprus
Hong Kong
Israel
Kuwait
Qatar
Singapore
Slovenia
United Arab Emirate
38
55
67
12
0
0
41
12
18
38
57
67
12
0
0
41
12
18
38
57
68
12
0
0
41
12
18
39
57
67
12
0
0
48
13
18
41
57
69
12
0
0
52
14
18
39
57
68
12
0
0
50
14
18
41
60
70
12
0
0
50
19
18
44
62
72
13
0
0
55
29
18
44
62
73
14
0
0
55
29
18
43
58
76
0
0
0
55
30
18
45
60
76
0
13
0
55
33
18
44
60
75
0
11
0
55
33
18
44
60
74
0
11
0
55
33
18
44
60
74
0
11
0
55
39
21
44
60
76
0
11
0
52
39
21
OECD
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
United States
18
35
4
33
41
2
13
7
10
14
0
79
3
0
97
45
50
1
17
4
2
25
42
15
19
33
5
33
41
2
13
7
9
14
0
81
3
0
97
47
63
1
17
4
2
24
45
16
19
38
5
32
44
2
13
7
11
7
0
81
3
0
97
47
63
1
17
5
2
24
46
16
19
38
5
33
44
4
13
6
10
7
0
82
4
0
97
50
63
1
17
5
2
24
47
15
20
38
5
34
44
4
13
7
10
8
0
79
5
0
96
50
63
1
17
5
2
23
48
17
20
40
7
35
40
6
13
8
11
14
0
79
5
0
96
47
63
1
20
5
1
23
48
19
21
40
7
39
40
9
13
7
11
13
0
83
5
1
97
47
56
1
23
6
1
22
48
21
21
40
8
39
40
9
13
7
12
11
0
86
5
1
97
47
56
1
27
6
1
22
49
21
22
40
8
39
42
11
11
7
13
16
0
86
5
1
97
47
56
1
27
6
1
22
51
21
22
40
9
36
42
11
11
6
12
21
0
86
5
1
97
47
67
1
31
5
1
22
53
23
22
40
10
38
41
9
11
6
13
21
0
86
5
1
97
44
67
1
30
5
1
21
54
24
23
40
10
38
41
9
20
6
13
32
0
87
6
1
97
44
67
1
30
7
1
23
54
24
23
40
10
38
41
9
22
6
13
28
0
87
10
2
97
41
67
1
30
7
1
23
56
28
23
40
10
39
41
8
22
6
14
28
0
87
10
1
97
38
67
1
32
7
1
23
57
29
24
40
10
42
41
9
22
6
14
28
0
87
10
1
97
38
67
1
33
7
1
23
57
32
Appendix Table 1 cont'd - Percentage of Foreign Banks among Total Banks, by Country
Country
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
SA
Bangladesh
India
Nepal
Pakistan
Sri Lanka
7
0
6
36
5
0
8
5
6
31
5
0
8
5
6
31
9
0
9
5
8
25
9
0
9
3
8
25
14
0
9
3
8
25
19
0
9
3
8
22
14
0
8
3
9
15
13
0
8
3
9
15
12
0
8
3
9
15
12
0
9
3
10
15
16
0
12
3
11
15
30
0
13
3
12
13
35
0
13
3
12
13
38
0
13
3
12
13
38
0
SSA
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Congo
Cote d'Ivoire
Ethiopia
Ghana
Kenya
Madagascar
Malawi
Mali
Mauritania
Mauritius
Mozambique
Namibia
Niger
Nigeria
Rwanda
Senegal
Seychelles
South Africa
Sudan
Swaziland
Tanzania
Togo
Uganda
Zambia
Zimbabwe
31
50
83
60
80
17
50
40
67
0
45
24
75
43
20
25
55
33
60
75
5
29
50
33
17
9
80
55
0
47
50
30
32
40
83
60
83
17
50
50
70
0
46
24
75
43
17
20
58
33
50
75
5
29
50
33
16
9
80
57
25
53
50
30
33
40
83
50
83
17
43
50
64
0
40
24
75
43
17
20
67
83
50
75
5
29
50
33
15
9
80
56
25
56
50
25
34
40
83
38
86
17
43
50
64
0
40
26
80
43
29
20
67
86
50
75
5
29
50
25
16
9
80
55
25
60
50
25
37
50
86
38
88
17
38
50
64
0
40
26
100
43
38
17
67
100
50
83
9
29
60
25
15
8
80
60
25
67
50
25
38
50
86
44
88
17
56
50
64
0
40
27
100
38
38
17
69
100
50
83
13
14
60
25
13
8
80
60
25
67
50
20
39
50
86
44
88
17
56
57
75
0
43
26
100
50
43
17
64
91
50
83
12
14
64
25
15
8
80
60
25
67
56
19
38
50
86
44
88
17
56
57
75
0
40
26
100
50
38
14
67
91
43
83
11
14
64
25
16
0
80
57
25
71
56
18
39
44
75
44
88
17
56
57
75
0
47
28
100
50
38
14
73
90
43
83
11
14
64
40
17
8
80
55
25
71
56
18
41
44
75
50
88
17
56
57
75
0
53
28
100
50
38
14
73
90
43
83
11
29
64
40
17
13
80
61
25
71
63
20
43
50
78
50
88
17
56
57
75
0
58
30
100
50
38
14
71
90
43
83
10
43
64
40
21
13
80
65
20
71
67
21
49
50
78
44
89
20
60
63
75
0
52
30
100
43
44
14
71
90
43
86
16
43
77
40
21
20
80
65
17
79
67
23
50
50
78
44
89
25
64
63
75
0
48
29
100
43
44
25
67
90
43
86
16
43
85
40
21
27
80
64
17
79
78
31
52
50
78
50
100
50
73
63
77
0
48
31
100
43
56
38
69
91
43
86
16
57
83
40
21
27
80
64
17
76
89
31
53
50
78
50
100
50
80
67
75
0
48
31
100
43
56
38
69
91
43
86
16
57
83
40
21
27
80
64
17
82
89
31
TOTAL
21
22
23
25
26
27
28
28
29
29
30
32
34
34
35
Appendix Table 2 - Percentage of Foreign Bank Assets among Total Bank Assets, by Country
Country
2004
2005
2006
2007
2008
2009
EAP
Cambodia
China
Indonesia
Korea Rep.
Malaysia
Mongolia
Philippines
Thailand
Vietnam
5
..
..
29
16
18
0
..
3
..
4
36
0
33
16
17
9
1
3
2
4
39
0
26
13
17
7
2
2
1
5
61
2
33
12
19
7
1
5
1
4
61
2
30
13
18
..
1
7
1
4
59
1
31
12
17
..
1
6
1
ECA
Albania
Armenia
Azerbaijan
Belarus
Bosnia-Herzegovina
Bulgaria
Croatia
Czech Republic
Estonia
Georgia
Hungary
Kazakhstan
Kyrgyzstan
Latvia
Lithuania
Macedonia
Moldova
Poland
Romania
Russia
Serbia & Montenegro
Slovakia
Turkey
Ukraine
51
..
..
1
..
67
72
88
84
95
13
65
6
..
51
91
54
31
72
54
..
57
95
..
28
42
..
56
1
14
87
71
92
83
99
32
63
4
..
58
92
54
25
76
58
7
69
92
..
28
43
..
62
1
12
90
74
90
84
98
66
61
5
..
64
92
56
31
75
88
9
84
91
17
41
42
93
60
3
19
91
76
90
86
97
66
64
13
..
65
92
63
37
74
89
10
82
90
17
46
42
94
64
5
19
92
80
90
85
99
66
67
16
..
66
93
69
41
72
89
13
75
92
15
58
40
91
71
5
18
88
80
90
84
99
66
64
18
..
66
92
68
41
67
85
12
74
88
13
56
LAC
Antigua & Barbuda
Argentina
Barbados
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Rep.
Ecuador
El Salvador
Guatamala
Haiti
Honduras
Jamaica
Mexico
Nicaragua
Panama
35
..
29
100
36
19
..
10
26
..
12
12
38
11
..
31
84
82
31
48
35
..
27
100
37
21
..
21
27
..
9
11
50
11
..
32
87
83
22
47
35
..
26
100
18
23
..
17
23
..
9
12
80
12
..
30
87
81
30
56
33
..
28
100
18
23
..
14
36
..
8
13
97
13
..
47
88
78
48
66
33
..
29
100
16
19
37
13
36
..
7
13
97
32
..
46
95
75
68
..
29
..
28
100
15
19
33
12
34
..
7
15
96
32
..
49
91
73
67
..
Appendix Table 2 cont'd - Percentage of Foreign Bank Assets among Total Bank Assets, by Co
Country
2004
2005
2006
2007
2008
2009
Paraguay
Peru
Trinidad & Tobago
Uruguay
Venezuela
68
41
13
50
31
63
49
13
75
30
60
48
13
87
29
58
48
14
47
25
62
50
56
48
26
48
48
56
55
..
MENA
Algeria
Bahrain
Egypt
Iran
Jordan
Lebanon
Libya
Morocco
Oman
Saudi Arabia
Tunisia
Yemen
13
5
69
10
..
2
..
..
..
..
..
20
..
15
8
67
12
..
14
..
..
..
..
..
29
..
17
8
65
21
..
16
..
..
..
..
..
27
..
19
7
69
25
..
17
33
..
19
..
..
26
..
17
8
65
25
..
22
35
..
18
..
..
27
..
18
10
55
25
..
23
36
..
31
..
..
22
..
OHI
Cyprus
Hong Kong
Israel
Kuwait
Qatar
Singapore
Slovenia
United Arab Emirates
52
15
91
..
..
..
..
21
3
51
19
92
..
12
..
2
25
3
49
22
91
..
10
..
10
24
1
46
22
91
..
8
..
10
24
1
45
23
91
..
7
..
3
26
2
47
19
92
..
7
..
7
25
2
OECD
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
United States
9
..
26
..
4
7
..
..
5
4
..
..
..
0
100
..
..
..
..
..
17
2
9
20
11
..
22
13
4
20
55
5
24
4
..
40
1
0
100
7
..
32
16
2
0
4
11
21
11
5
19
13
4
19
65
5
14
13
..
43
3
0
100
9
83
16
15
2
0
4
12
21
12
5
22
12
4
18
65
6
11
14
..
42
7
0
95
10
78
17
15
2
0
4
14
23
11
3
25
14
4
18
67
6
12
14
..
36
6
0
96
2
76
16
15
2
0
5
19
19
11
3
23
49
5
20
65
6
12
14
..
35
6
0
95
3
78
16
15
2
0
5
15
20
SA
Bangladesh
India
Nepal
5
2
4
22
5
2
4
14
8
3
4
20
8
2
4
16
7
2
5
14
7
3
5
13
Appendix Table 2 cont'd - Percentage of Foreign Bank Assets among Total Bank Assets, by Co
Country
2004
2005
2006
2007
2008
2009
Pakistan
Sri Lanka
29
..
23
..
48
..
50
..
51
..
53
..
SSA
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Congo
Cote d'Ivoire
Ethiopia
Ghana
Kenya
Madagascar
Malawi
Mali
Mauritania
Mauritius
Mozambique
Namibia
Niger
Nigeria
Rwanda
Senegal
Seychelles
South Africa
Sudan
Swaziland
Tanzania
Togo
Uganda
Zambia
Zimbabwe
13
50
..
77
77
38
74
45
89
..
..
46
100
49
25
5
37
..
..
68
..
32
56
57
..
..
82
..
..
88
69
..
25
48
90
77
79
36
71
44
90
..
..
46
100
46
28
3
44
99
62
72
..
53
62
52
22
..
80
92
..
89
69
..
26
49
92
69
80
33
74
56
100
..
..
46
100
46
30
0
58
99
46
74
8
54
68
57
21
8
81
93
..
95
70
..
28
50
92
72
76
58
71
58
..
..
57
39
100
46
40
4
69
100
45
69
8
48
93
60
23
19
83
93
..
95
87
..
26
52
92
66
100
64
82
60
..
..
58
38
100
48
52
10
61
100
53
..
5
43
93
65
21
20
81
58
..
86
99
..
29
55
90
64
100
66
80
62
..
..
60
38
100
50
51
4
66
100
54
..
6
27
92
61
22
20
88
57
..
89
100
44
TOTAL
11
12
12
13
13
13
N
Note:
Foreign bank asset share is only reported when asset information is available in Bankscope for more than 60 percent of the banks active in the
ocountry in that year. Since asset information is lacking in Bankscope for the vast majority of banks before 2004, we do not report asset shares for any