Bank of Japan data shows Japanese bank lending growth accelerated to 4.4% year-on-year in December 2025. Major banks led with 5.7% growth, while foreign banks saw explosive 29.7% expansion in yen loans. In contrast, overall deposit growth remained weak at 0.9%, with Shinkin banks experiencing a 0.4% contraction.
📈 Loans and Discounts (Lending Activity)
Overall Growth: The total lending growth accelerated to 4.4% in December 2025, up from 4.1% in November. For the October-December quarter, growth averaged 4.2%, higher than the 3.5% in the July-September quarter.
Banking Sector Breakdown:
Major Banks Showed Strong Momentum: Lending growth surged to 5.7% in December, significantly higher than other domestic institutions.
Regional Banks I maintained stable growth at 4.3%.
Regional Banks II and Shinkin Banks had more modest growth at 3.1% and 1.4%, respectively.
Standout Performer: Foreign banks' yen-denominated lending in Japan grew at a staggering 29.7% year-on-year in December, continuing a period of exceptionally high growth.
💰 Deposits and CDs
Overall Growth: Total deposit growth was steady but slow at 0.9% in December, unchanged from November.
Banking Sector Breakdown:
City Banks: Deposit growth improved slightly to 0.8%.
Regional Banks: Growth remained relatively stronger, holding at around 1.5%.
Key Contrast: Shinkin Banks experienced a continued contraction in deposits, with growth at -0.4% in December.
🔍 Key Definitions (Important for Interpretation)
The reporting scope differs slightly between the "Loans" and "Deposits" tables. For example, the "Major Banks" category for loans includes trust banks, while the "City Banks" category for deposits does not.
"Average amounts outstanding" refers to the monthly average balance.
Lending data for foreign banks is for yen-denominated loans in Japan only.
In summary, the data shows a clear divergence: strong and accelerating credit expansion, particularly by major and foreign banks, contrasted with very weak and segmented deposit growth.
