Global banking activity heated up in the first quarter, marking a recovery from a massive slump amid the economic crisis, fresh data from the Bank for International Settlements showed on Wednesday.

"For the first time since September 2008, after a cumulative contraction of almost 11 per cent, international banking activity in aggregate rose by 2 percent or 700 billion dollars in the first quarter of 2010," said the bank for central banks.

International lending showed a dramatic recovery in developed countries. After declining $532 billion during the last quarter of 2009, it grew by $385 billion in the first quarter.

Banks in Britain and the United States had issued about half of the increase in loans, noted the BIS.

"Around 75 per cent of the $212 billion increase in external claims of banks in the United States was accounted for by interbank positions with three countries - the Bahamas, Canada and Britain," said the BIS.

Meanwhile, about 60 per cent of the $177 billion increase in lending by British banks were made to borrowers in European countries and Japan, noted the BIS.