LONDON, June 27, 2011 /PRNewswire/ --
A new report from TheCityUK (http://www.thecityuk.com/) reveals UK banks account for 19% of lending to emerging economies - more than any other country.
The report, Financial Services in Emerging Markets, centres around international bank lending and its impact on infrastructure and other major projects.
In it, UK financial services body TheCityUK finds spending by UK banks to emerging economies totalled $862bn at the end of 2010. This spending is particularly important to some countries, accounting for 71% of lending to South Africa, 46% to United Arab Emirates, 30% to China, India and Malaysia, and 17% to Brazil.
It also emerges that growth in the largest emerging economies - led by Brazil, China and India - is being facilitated by rapid expansion of domestic and international financial markets in those countries. These markets increased by between 100% and 400% between 2005 and 2010, exceeding the 97% rise in nominal GDP in the same countries during this period.
In addition to international bank lending, the markets to have roughly doubled in size between 2005 and 2010 were domestic bonds and insurance. Markets to have risen more rapidly included commercial bank assets, marine insurance, mutual funds and equity market capitalisation, each of which rose roughly threefold. The number of contracts traded on derivatives exchanges grew fastest with a fivefold increase.
Only pension assets and international bonds have grown more slowly than GDP. Pension assets were up by a third and international bonds by over three quarters.
For many leading countries - including Brazil, China, India, Mexico, Turkey and Poland - their ranking amongst emerging economies based on GDP is similar to their ranking based on financial markets. For other countries there is some difference: for example, South Africa, Malaysia and Chile rank higher in the size of financial markets than on GDP ranking. By contrast, Russia, Indonesia and Saudi Arabia tend to have a lower ranking in financial markets than for GDP.
TheCityUK is the independent membership body promoting the UK's financial service industry and related professional services industry. It was created with the support and initial financial backing of the City of London Corporation.
TheCityUK is the cross-sector voice for the UK financial services community working to build a deeper pool of support across the UK, promoting UK financial services overseas and contributing to the regulatory and trade policy debate.
The purpose of the organisation is to partner prosperity - supporting the competitiveness of UK financial services and protecting their considerable economic contribution. TheCityUK co-ordinates and facilitates the contribution of its members to drive and deliver its priorities.
Its UK-wide financial services membership covers all sectors in the financial services industry and the related professional services industry. It is independent and politically neutral.