Foreign banks are circling Australia once more as they bet on resources and infrastructure investment gathering pace at a time when local banks are distracted by a government inquiry following a string of scandals.

Some, like Barclays, are plotting a return to the market, which holds some $3.5 trillion in banking assets and whose banks are among the most profitable in the world, just two years after an abrupt exit.

Besides Barclays, Dutch lender ABN AMRO expects to launch onshore banking operations in Australia in the second half, an executive said, while Italy’s Intesa Sanpaolo plans to open a branch, a person familiar with the move said.

Paris-based Société Générale is also planning to re-open a branch in Australia, several years after winding down its local operations.

Bankers and analysts expect more to follow suit.

Attractions include stronger economic growth, an expected pickup in investment in Australia’s vast resources sector as commodity prices recover, as well as ongoing infrastructure investment and a strong deals market.

“We are seeing a lot of European banks who have expertise in new areas such as renewable energy join the market here, whereas initially some of the Australian banks were slow or the return expectations were not to their liking,” said Peter Davis, executive director for Asia Pacific corporate and institutional banking at ABN AMRO.

A high-level government inquiry into lenders’ misconduct also offers an opportunity as it is likely to distract Australia’s biggest banks, who as a result of the hearings, have already imposed stricter conditions on retail borrowers, bankers said.

“I suspect the primary issue will be potential distraction of senior management towards the inquiry and that may mean that they are not as focused on the business as they might have been,” Davis said, referring to the inquiry known as a Royal Commission.

Several senior executives have already resigned at firms including Commonwealth Bank of Australia (CBA) and wealth manager AMP. Banks face the prospect of further regulation and more revelations as the inquiry continues.

The four largest banks – Australia and New Zealand Banking, CBA, National Australia Bank and Westpac – dominate the local market, accounting for 79 per cent of gross loans, according to data from the banking regulator. Australia’s syndicated loan market data shows the share going to foreign banks has been rising, a trend that many now expect to gather pace.

While European lenders’ took 17 per cent of the market last year, up from 15 per cent in 2015, Chinese banks including Bank of China and Industrial and Commercial Bank of China saw their share jump to 11 per cent from four per cent.

So far this year, Australian banks had a 40 per cent share of the domestic syndicated loan deals compared to 53 per cent in 2015, Thomson Reuters LPC data shows.