Unless otherwise noted, all data, graphs and tables have been produced to illustrate EU 28 data. The EU 28 data contained in this chapter has been compiled from publicly available information released by the European Central Bank unless otherwise noted. The data relevant for EFTA countries have been compiled from the corresponding national central bank, financial supervisory authority, national office of statistics and national banking associations members of the European Banking Federation.

General trends

The core banking activities of raising deposits from and providing credit to customers are crucial for Europe’s banks. Private sector deposits and loans grew in 2019, particularly for households and non-financial corporations.


Domestic or euro area deposit liabilities in the EU rose by almost 5% to €24.7 trillion, excluding euro area deposits of non-euro area monetary financial institutions (MFIs). Monetary financial institution deposits saw the largest increase in percentage, 26%, in Denmark, while France had the largest increase in real terms, by about €182 billion. Deposits of non-MFIs excluding central government rose by €168 billion in France, by €137 billion in the United Kingdom and by €135 billion in Germany.

Total deposits from non-MFIs, excluding central governments, grew by 4.7% to €17.7 trillion in the EU at the end of 2018, with €13.1 trillion in deposits in the euro area.

The growth continues to be driven by an increase in deposits from households (including non-profit institutions serving households), which rose by 6.2% year-on-year to €10.3 trillion and non-financial corporations (NFCs), up by 2.9% to €3.5 trillion. Germany, UK and France accounted for about two-thirds of the €586 billion increase in euro area household deposits in 2019.


The total value of loans outstanding from EU MFIs increased by 3.9% in 2019 to more than €26.1 trillion. The increase mainly came from growth in loans to non-MFIs, excluding general government, which rose by 3.8% year-on-year to almost more than €16.6 trillion.

As with deposits, United Kingdom, France and Germany accounted for about three-quarters of the €1.0 trillion increase in loans outstanding in the EU.

Loans to EU households rose by 4.8% in 2019 to €8.7 trillion. Loans to households in the euro area grew for the fifth successive year, adding almost €730 billion on loans outstanding since 2014 and slightly over €1.0 trillion since 2008. NFC loans outstanding in the EU rose by 1.8% in 2019 to almost €5.6 trillion, the highest level since 2011.

Real estate activities, professional, scientific and technical activities and administrative and support service activities accounted for more than one third (37.6%) of loans outstanding at the end of 2019, and up from 30.8% in Q4 2008. Manufacturing and the wholesale and retail trades accounted for 14.3% and 13% respectively.

Lending standards, i.e. banks’ internal guidelines or loan approval criteria, continued to ease in the euro area throughout 2019 for loans to both SMEs and large enterprises, reflecting the general trend evident since 2014.

Net demand for new lending declined in 2019, with the net percentage of banks reporting a decrease to both SMEs and large enterprises, with a negative net percentage for large enterprises reaching to -4.7%.

Bank Lending Survey

The Role of Banks: lending and payments

Banks act as facilitators between those who have money and those who need money, while also providing the systems for funds to flow between payers and payees.

The primary role of banks is to take in money from those with cash in hand and to lend money to borrowers. Banks then receive loan repayments which can be used in new lending to other borrowers.

The traditional view of this process has been that banks “create” money by providing some of the money on deposit in the form of loans to borrowers, which returns to the banking system as deposits. This money can then be lent again and again, resulting in a multiplier effect. More recently, money creation has focused on how lending creates bank deposits i.e. whenever a bank provides a loan to a customer, a deposit is created.

Banks cannot lend freely without limits. They have to be able to lend profitably in a competitive market, while also managing liquidity risks (i.e. they have sufficient liquid assets to repay depositors or investors when required) and credit risks (some borrowers may not repay their loans). These lending activities are regulated and safeguarded by global/international standards and EU regulations.

Just as money can be created, it can also be destroyed. For example, in the case of a mortgage being used to purchase a second-hand property, the purchaser could use the proceeds from the sale to pay an existing mortgage, effectively bringing the amount of money created back to zero.

Banks are also key players in national and international payment systems. Almost 98 billion cashless payments were made by non-MFIs in the EU area in 2019 and 150 billion in EU-28. Slightly less than half (46.6 billion) of those were card payments, while about one quarter were credit transfers (22.3 billion) or direct debits (21.3 billion). In the EU-28, cashless payments accounted for slightly over 150 billion transaction with United Kingdom, France and Denmark leding with about 50% of the total payments.

The Single European Payments Area (SEPA) aims to harmonise and integrate payment markets across Europe, with one set of euro payment instruments: credit transfers, direct debits and payment card, common standards and practices and a harmonised legal basis. SEPA covers more than 520 million people in the 28 EU Member States and six non-EU countries (Iceland, Liechtenstein, Monaco, Norway, San Marino and Switzerland).

The number of ATMs in the European Union totalled in 2019 about 430,000, which is an average of 1,192 inhabitants per ATM, down from 1,112 in 2014 when Europe reached the highest number of ATM with 455,711. This decline signals the increasing lower demand for cash confirming the move towards the increasing use of digital banking and payments. The number of ATMs in the EFTA countries was about 7,000 in 2019 with an average of 1,323 inhabitants per ATM.

As far as convenience and accessibility of banking services are concerned, Austria and Portugal lead in terms of the number of inhabitants per ATM, the parameter being 678 and 716 respectively. At the same time, the least number of inhabitants per ATM was registered in Sweden, Netherlands and Lithuania. In each of these countries, there are between 4,079 and 3,060 inhabitants per device.