Loans against art have grown from $20 billion to $36 billion in 5 years

The art market has slowed in recent years — with the cumulative profits of the world’s most expensive pieces down by hundreds of millions of dollars — but that hasn’t stopped the one percent from using their art collections for commercial gain.

The world’s biggest banks are increasingly seeing their customers use expensive art as collateral, with the total value of loans taken out against works of art rising from $20 billion in 2019 to around $36 billion by end of this year, according to the data. Bloomberg News.

“If you’re an owner and need liquidity now, you stop selling and instead borrow against your art, waiting for better market conditions,” said Adriano Picinati di Torcello, global art and finance coordinator for Deloitte.

Bank of America and Citigroup both have teams dedicated specifically to clients with high-value art collections, with the former seeing lines of credit contracted for art grow nearly 15 percent over the past year. At the same time, art sales have slowed: in 2022, the combined value of the top ten pieces of art sold at May auctions was $760 million. Last year it was $403 million. This year, the total was $312 million, according to the report Bloomberg.

Despite this cooling market, financial experts point out that art loans remain particularly effective because the value of a piece of art is less volatile than other forms of collateral.

“Even though rates are higher, art is a very stable long-term asset compared to other assets in terms of volatility,” Fotini Xydas, head of art finance at Citi Private Bank, told Bloomberg.

“We don’t ask what Andy Warhol is worth every day,” said Katy Lingle, head of U.S. credit solutions at JPMorgan Chase & Co. Private Bank.

Read on to learn more about the 10 most expensive works of art sold at auction in 2023.