Deposits and loans have grown sharply at Europe's banks since the onset of the coronavirus crisis in early 2020, with France registering a particularly sharp increase.
Deposits at French monetary financial institutions, or MFIs, rose 16% between June 2019 and June 2020 to almost €6 trillion, and then by a further 9% to almost €6.5 trillion in June 2021, according to data from the European Central Bank. MFIs include mostly commercial banks, but also central banks, money market funds and other deposit-taking institutions.
Banks in Germany, the U.K., Spain and the Nordic region also saw deposits rise more quickly between June 2019 and June 2021 than in previous years. Lending showed a similar trend, increasing especially quickly at banks in France, Germany and the U.K.
According to the ECB, the higher levels of deposits largely reflect lower consumption amid the pandemic, much of it involuntary, with aggregate household income largely insulated against economic contraction due to government stimulus measures. Meanwhile loose monetary policy and COVID-19 support schemes have encouraged the extension of credit to the private sector and households.
French MFIs saw loans reach €6.441 trillion in June 2020, growth of around 13% from June 2019, and grew by a further 9% to more than €7 trillion in June 2021.
Loan-to-deposit ratios have mostly fallen at Europe's largest banks since the onset of the pandemic. French bank BNP Paribas SA saw its ratio decline to 82.5% in June 2021 from 95.3% in June 2019. Société Générale SA's fell to 97.0% from 106.1% over the same period, while Crédit Agricole Group's fell to 98.3% from 107.7%.
U.K.-based HSBC Holdings PLC's ratio dropped to 63.5% from 74.0%, while Barclays PLC's fell to 69.8% from 85.6%.