The report examines the market share of subsidiaries of third country banking groups in the European Union. Although their overall market share is modest, certain categories, such as interest rate derivatives and commission income, indicate a significant influence of these non-European institutions. As of December 2024, the market share of these subsidiaries was 9.8% of the total EU banking sector.
This report was published in November 2025 by the European Banking Authority (EBA). It analyzes the market share of subsidiaries of banking groups from third countries (non-EU) operating in the European Union. The scope covers assets, liabilities, banking products and services within the European banking sector, focusing on end-2024 data from FINREP and COREP reports. The document relies on a sample of 165 subsidiaries of non-European banking groups, representing about 3.1 trillion euros in assets, and covers several third countries including the United States, the United Kingdom, Switzerland, Japan, and China.
The report highlights the important but moderate role of subsidiaries of banking groups from third countries in the EU banking market, with an overall market share of about 9.8% of total assets as of December 31, 2024, slightly down from 10.2% in 2023 (p. 7, 14). Their presence is particularly marked in certain segments, notably interest rate derivatives (35% market share) and commission income related to commodities (65%) and collective investment services (55%) (p. 7, 30, 32). These subsidiaries focus mainly on loans and derivatives activities, representing 69% of their assets (p. 7, 14). The majority of exposures are cross-border, with 75% of assets held against counterparties outside the subsidiary’s country of establishment, including 38% outside the EU (p. 16). Subsidiaries obtain 59% of their liabilities from counterparties located outside the EU, mainly from their parent company (p. 22-23). The business model favors services to financial institutions and corporations, with strong dependence on interest rate derivatives, which could generate risks in case of market disruptions or operational continuity issues (p. 33). The report recommends continuous monitoring and annual production of these indicators to track the evolution of this financial interconnection (p. 9-10).
The European Commission mandated the EBA in June 2021 to study the European banking sector’s dependence on non-European banks and the exposure of EU banks to foreign currency financing (p. 9). This report fits within this framework, aiming to provide annual indicators on the market share of non-EU entities in the European banking sector, as well as on the geographic and sectoral concentration of their activities. The objective is to assess potential risks related to this dependence and to inform supervisory authorities and policymakers. The methodology relies on FINREP prudential reporting data, with a sample of 165 subsidiaries of third country groups, excluding branches due to reporting differences (p. 9-11). The report covers end-2024 data, with a comparison to the previous year, and is limited to subsidiaries subject to the same reporting requirements as European banks.
- Market share of assets: Third country subsidiaries hold 9.83% of total EU banking assets, with 8.03% of loans, 6.34% of debt securities, and 29.31% of derivatives (p. 14). Their market share has slightly decreased since 2023, notably in loans and derivatives (p. 14).
- Geographic distribution of assets: 75% of subsidiaries’ assets are held against counterparties outside the country of establishment, including 38% outside the EU. Loans and derivatives are mainly granted to counterparties located in third countries (42% and 54% respectively) (p. 16-17).
- Main counterparties: 66% of assets are held against financial institutions (35% credit institutions, 31% other financial institutions), which is significantly higher than the EU banks’ average (25%) (p. 14-15).
- Derivatives: Third country subsidiaries hold 29% of the derivatives market in the EU, mainly interest rate derivatives (58% of derivatives held, 35.5% market share) (p. 19-20). The majority of derivatives are held against financial institutions (50% credit institutions, 42% others) (p. 20).
- Liabilities: Subsidiaries represent 6.6% of deposits, 27.6% of derivative liabilities, and 26.3% of short positions in the EU. 59% of liabilities come from counterparties located outside the EU, mainly the parent company (p. 22-23).
- Prudential indicators: Their market share is 11.17% in CET1 capital, 10.64% in total own funds, and 7.75% in risk-weighted assets (p. 24).
- Revenues: Subsidiaries generate 5.63% of interest income, 9.9% of commissions, 2.1% of dividends, and 11.9% of other operating income in the EU (p. 25-26). Interest income mainly comes from loans and securities held against financial institutions (57%) (p. 27-28).
- Commissions: High share in commissions on commodities (65%), fiduciary transactions (48%), administrative services for collective investment funds (30%), and custody services (22%) (p. 29-31).
- Services provided: Strong market share in administrative services for collective investment funds (55%), fiduciary transactions (40%), and asset custody (22%), concentrated in a few American banks (p. 31-32).
Findings:
- Overall market share of third country subsidiaries in the EU: 9.8% of assets, slightly down since 2023 (p. 7, 14).
- Concentration of activities in loans and derivatives, with 69% of assets in these categories (p. 7, 14).
- Majority exposure to counterparties outside the country of establishment, including 38% outside the EU (p. 16-17).
- Strong presence in interest rate derivatives (35.5% market share) and commodity commissions (65%) (p. 19-20, 30).
- Liabilities mainly obtained from the parent company and other entities outside the EU (59%) (p. 22-23).
Assumptions and interpretations:
- The subsidiaries’ business model is oriented towards cross-border services, notably to financial institutions and corporations, with lower presence in retail clients (p. 7, 22).
- High dependence on interest rate derivatives exposes the sector to risks in case of market disruptions or operational continuity issues (p. 33).
Uncertainties:
- The absence of consolidated data for some individual subsidiaries limits full sector coverage (p. 10).
- Future market share evolution will depend on international economic and regulatory dynamics (p. 9).
The report concludes that subsidiaries of banking groups from third countries play a significant role in certain key segments of the European banking market, notably in derivatives and services to financial institutions (p. 33). Their business model is characterized by a strong orientation towards cross-border activities and specialized services, with less involvement in retail financing. The overall market share slightly decreased in 2024, mainly due to declines in loans and derivatives. The report highlights potential risks related to this dependence, especially in case of market disruptions or issues with cross-border operational continuity. It recommends continuing annual monitoring of these indicators to better understand financial interconnection between the EU and third countries, and to inform supervision policies and risk management (p. 9-10, 33).
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