Australian Bureau of Statistics

Rate the ABS website
ABS Home > Statistics > By Release Date
ABS @ Facebook ABS @ Twitter ABS RSS ABS Email notification service
5232.0 - Australian National Accounts: Financial Accounts, Mar 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 25/06/2004   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product

MARCH KEY FIGURES

Credit market outstandings at end
Demand for credit during
Other changes during
Credit market outstandings at end
Dec Qtr 2003
Mar Qtr 2004
Mar Qtr 2004
Mar Qtr 2004
$b
$b
$b
$b

Non-financial corporations
Private
1,067.0
6.3
10.1
1,083.4
National public
45.4
-0.6
-1.6
43.2
State and local public
38.8
0.3
0.0
39.1
General government
National
59.9
0.8
0.3
61.1
State and local
37.0
0.2
0.0
37.2
Households
738.4
24.6
0.0
763.0
Total
1,986.7
31.5
8.9
2,027.0

Total demand for credit
Graph - Total demand for credit

Credit market oustandings
Graph - Credit market oustandings



MARCH KEY POINTS


SUMMARY

  • Total demand for credit by the non-financial domestic sectors for the March quarter 2004 was $31.5b, a decrease of $22.4b on the previous quarter. Reduced share raising by private non-financial corporations (down $12.7b) and reduced borrowing by households for housing (down $5.1b) were the main contributors to the decrease.


NON-FINANCIAL CORPORATIONS
  • Private non-financial corporations raised a net $6.3b, with share raisings of $4.7b (down from $17.4b) and issuance of $2.1b worth of bonds.
  • National public non-financial corporations repaid a net $0.6b and state and local public non-financial corporations raised a net $0.3b during the quarter.


GENERAL GOVERNMENT
  • National general government raised a net $0.8b during the quarter, mainly by issuing bonds. State and local general government raised a net $0.2b through loan borrowings.


HOUSEHOLDS
  • Households raised a net $24.6b during the quarter, a decrease of $8.0b on the previous quarter, to bring their outstandings to $763.0b at the end of March 2004. Households borrowed $10.9b from banks (of which $3.3b was for owner occupied housing and $3.7b for investment housing), a decrease of $12.3b from the previous quarter. Borrowing from financial intermediaries n.e.c. was $12.1b during the quarter (mainly for housing), an increase of $5.7b from the previous quarter.


NOTES


SYMBOLS AND OTHER USAGES

b (billion)


billion (one thousand million)


trillion (one million million i.e. one thousand billion)


n.y.a. not yet available



CHANGES TO THIS ISSUE

ABS standard dissemination tools have been used to produce the printed tables and electronic series for the first time for this issue. For the print version there are a number of small presentation changes, the most significant of which are different page breaks to tables and revised page numbering.


Electronic spreadsheet versions of the tables containing longer time series will be available on the Ausstats service for the first time. Page 5 contains a list of tables available in electronic format additional to the equivalents to the printed tables. Electronic series commence at June 1988 for stocks and September 1988 for transactions.


Users of the spreadsheet release are alerted to the inclusion of a number of new series as a result of changes in activity of the central bank and revisions to other depository corporations. These impact tables 5, 12, 21, 35, 36, 39, 43, and 47.



SIGNIFICANT EVENTS

During the March quarter 2004, two significant foreign-owned financial institutions classified to other depository corporations transferred most of their assets and liabilities to Australian bank branches newly registered by the same foreign owners. The transfers have been treated as transactions in, not reclassification of, financial assets and liabilities in both Financial Accounts and Balance of Payments statistics.



REVISIONS IN THIS ISSUE

The data incorporate the results of quality assurance work undertaken with providers and other revisions back to June quarter 2002. They include revisions to life insurance and pension fund assets, unfunded superannuation claims on state and local general government following annual actuarial reviews by the various jurisdictions, and bonds issued by non-resident institutions in the Australian market (kangaroo bonds). ABS is working on a longer time series for kangaroo bonds and is planning a revised presentation of the data in table 37 which will separately identify these series.



RELATED STATISTICS

For more information, contact Derick Cullen on ph. (02) 6252 6244, or email <finacct@abs.gov.au>.



INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Derick Cullen on Canberra (02) 6252 6244.



ANALYSIS AND COMMENTS: SECTORAL SUMMARY


INTERSECTORAL FINANCIAL FLOWS

During March Quarter 2004

Significant flows during the March quarter 2004 were the net $12.1b borrowed by households from financial corporations and the net $3.5b borrowed by non-financial corporations from financial corporations. Financial corporations borrowed a net $7.1b from the rest of world and general government repaid a net $2.7b to financial corporations.

Diagram: Financial Flows During March Quarter 2004



INTERSECTORAL FINANCIAL CLAIMS

At end of March Quarter 2004

At the end of March 2004, claims on non-financial corporations stood at: $400.8b from financial corporations; $269.7b from rest of the world; $131.0b from general government and $104.4b from households. Financial corporations financed claims on other sectors from net claims by households, $406.7b, and by rest of world, $199.3b.

Diagram: Intersectoral Financial Claims at end of March Quarter 2004


ANALYSIS AND COMMENTS: MARKET SUMMARY


FINANCIAL MARKET ANALYSIS

OUTSTANDING AT END
TRANSACTIONS DURING
OTHER CHANGES DURING
OUTSTANDING AT END
Dec Qtr 2003
Mar Qtr 2004
Mar Qtr 2004
Mar Qtr 2004
Selected Financial Instruments
$b
$b
$b
$b

Currency and deposits
736.8
2.9
0.9
740.5
Short term debt securities
329.7
12.2
0.0
342.0
Long term debt securities
537.3
33.0
-5.4
564.9
Derivatives
167.9
-15.3
5.8
158.3
Loans and placements
1520.4
31.0
-0.2
1551.2
Listed shares
801.0
5.0
21.9
827.9
Unlisted shares
795.3
11.0
10.6
816.8
Reserves of life offices and pension funds
583.3
7.0
9.2
599.5
General insurance prepayments and reserves
58.4
-0.3
0.0
58.1



Deposit liabilities increased to $740.5b at the end of March 2004, following net transactions of $2.9b during the quarter, compared with transactions of $32.4b in the previous quarter. Transactions in bank deposits were $7.7b, down from the $26.2b recorded during the December quarter.

Short term security liabilities increased to $342.0b at the end of March 2004, with net issuance of $12.3b and valuations remaining steady during the quarter. $11.0b in one name paper was issued, of which banks issued $19.8b. There was a net increase of bills of exchange on issue of $1.3b for the quarter.

Total bond liabilities increased to $564.9b at the end of March 2004 following net issues of $33.0b and valuation decreases of $5.4b during the quarter. Banks issued a net $11.3b, of which $9.5b was issued offshore. Financial intermediaries n.e.c, mainly securitisation vehicles, issued $12.3b, of which $9.1b was issued offshore.

The value of derivative contracts on issue at the end of March 2004 decreased by $9.6b to $158.3b. With net settlements of -$15.3b.

Loan liabilities rose to $1,551.2b at the end of March 2004 following net transactions of $31.0b and valuation decreases of $0.2b during the quarter. Borrowing by households continued to be strong, raising $24.6b, while pension funds borrowed $6.4b and financial intermediaries borrowed $3.2b during the quarter. Other depository corporations repaid a net $5.5b and private non-financial corporations repaid $4.4b.

The listed share market increased by $26.9b to $827.9b at the end of March 2004, with net issues of $5.0b and valuation increases of $21.9b.

The value of the unlisted share market increased by $21.5b to $816.8b at the end of March 2004. There were net issues of $11.0b, with issues by other depository corporations of $4.5b and Australian investment overseas of $4.7b. Valuation increases amounted to $10.5b.

At the end of March 2004, the reserves of life offices and pension funds were $599.5b following net transactions during the quarter of $7.0b and valuation increases of $9.2b. General insurance prepayments and reserves were $58.1b.


ANALYSIS AND COMMENTS: SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Private non-financial corporations raised a net $6.0b (excluding derivatives and accounts payable) during the March quarter 2004. They decreased loan liabilities by $0.5b and made a net issue of $2.1b in debt securities. New share issues raised a net $4.4b during the quarter. These transactions resulted in total borrowings outstanding of $416.0b and total equity on issue of $667.4b.


PRIVATE NON-FINANCIAL CORPORATIONS, NET ISSUE OF EQUITY AND BORROWINGS
Graph - Private non-financial corporations: net issue of equity and borrowings
During the March quarter 2004, total liabilities of national public non-financial corporations decreased by $3.3b to $85.7b. There was net redemption of debt securities of $0.8b and accounts payable increased by $0.5b. Liabilities of state and local public non-financial corporations increased by $1.1b to $138.4b.

Private non-financial corporations debt to equity ratio

From the end of March 2002 to the end of March 2004 the value of equity on issue increased by $79.2b. The value of debt outstanding rose $29.1b during the period. During the quarter, private non-financial corporation debt increased by $0.4b, while equities on issue increased by $16.0b. Over the March quarter 2004, the original debt to equity ratio fell and the value adjusted ratio was almost constant. The value adjusted ratio reflects the removal of price change from the original series.

DEBT TO EQUITY RATIO - JUNE 1995 BASE
    Graph - Debt to equity ratio, june 1995 base

FINANCIAL CORPORATIONS

Summary

During the March quarter 2004, financial corporations issued $31.2b in liabilities on a consolidated basis. Net issuers of liabilities were: banks $32.4b, financial intermediaries n.e.c. $13.4b, and pension funds $10.3b. Net redeemers were: other depository corporations $16.0b, the central bank $5.7b, life insurance corporations $2.0b, and other insurance corporations $1.0b.

Banks

During the quarter, banks increased their currency and deposits liabilities by $8.8b. They had net issuance in bonds of $10.0b, one name paper of $11.6b, and other accounts payable $5.2b. They also increased their loans and placements liabilities by $2.9b and net settlements of derivatives was $6.5b. Banks had an increase of $14.9b in financial assets during the quarter. Banks loaned a net $17.4b, with increases in loans to households of $10.9b, and to private non-financial corporations of $1.1b. They also increased their holdings of currency and deposits by $2.6b, bills of exchange by $1.0b, one name paper by $0.8b and equities by $0.7b. They reduced their holdings of derivatives by $5.5b and bonds by $1.7b

Other depository corporations

Funding of other depository corporations decreased by $16.0b during the March quarter 2004 following net redemptions in one name paper of $7.4b, loans and placements of $5.5b, and currency and deposits of $4.3b. These were partially offset by net issuance of equities of $4.5b. Financial assets decreased by $6.8b, through decreases in loans and placements of $3.6b, and in derivatives of $3.1b. These reductions were offset by increases in currency and deposits of $0.8b.

Life insurance corporations

At 31 March 2004, the financial assets of life insurance corporations stood at $187.0b, an increase of $0.7b from the previous quarter with net transactions of -$1.9b and valuation increases of $1.2b. During the quarter, there were net purchases of bonds of $1.2b, one name paper of $0.5b and loans and placements of $0.1b. There were net sales of currency and deposits of $2.5b, equity of $0.7b and bills of exchange of $0.3b. Pension fund claims against the reserves of life offices increased by $3.2b with net transactions of $2.1b and valuation increases of $1.1b. Other claims against the reserves of life offices decreased by $2.8b with withdrawals of $3.1b and valuation increases of $0.3b.

Pension funds

Net equity in reserves of pension funds was $561.3b at the end of the March quarter 2004, an increase of $19.0b (4%), following net transactions of $10.1b and $8.9b valuation increases during the quarter. Most asset classes experienced increases during the quarter, with transactions in long term debt securities of $4.4b, net equity of pension funds in life office reserves of $2.1b, currency and deposits of $1.5b, equities of $1.1b, loans and placements of $0.9b and short term debt securities of $0.3b. Transactions in unfunded superannuation claims were -$0.2b.

Other insurance corporations

Liability transactions were -$1.0b, to which net decreases in other accounts payable of $0.5b and loans and placements of $0.4b were the largest contributors. Transactions in financial assets of other insurance corporations fell by $1.8b due mainly to net decreases in one name paper of $0.7b, loans and placements of $0.6b and other accounts receivable of $0.6b. These decreases were partially offset by an increase in currency and deposits of $0.9b.

Central borrowing authorities

Total liabilities of central borrowing authorities were $106.8b at the end of the March quarter 2004. The authorities had net issue in bonds of $1.7b, a net redemption in one name paper of $0.8b and an increase in loans and placements liabilities of $0.6b.

Financial intermediaries n.e.c.

Financial intermediaries n.e.c. increased their liabilities by $13.4b during the quarter, mainly through increases in issue of bonds offshore of $9.1b, loans and placements of $3.0b and one name paper of $1.0b. Financial assets increased by $17.6b, mainly through loans to households which increased by $12.6b and purchases of equity issued by rest of world of $2.2b.

Net flow of currency and deposits to banks

Net transactions in currency and deposit liabilities of banks during the March quarter 2004 were $8.8b. Sectors that increased currency and deposit assets during the quarter included households ($2.3b), central borrowing authorities ($1.4b), private non-financial corporations ($1.1b) and other depository corporations ($0.9b).

CURRENCY AND DEPOSITS LIABILITIES, BANKS
    Graph - Currency and deposits liabilities, Banks

Asset portfolio of life insurance corporations and pension funds at end of quarter

At the end of March quarter 2004, life insurance corporations held $111.0b in shares and other equity (59% of their financial assets), of which $89.5b were in resident companies and $21.6b in non-resident companies; $38.8b in bonds (21% of their financial assets), of which $34.7b were in Australian bonds and $4.1b in non-resident bonds; and $18.1b in short term securities (10% of their financial assets).

At the end of March quarter 2004, pension funds held $264.2b in shares and other equity (49% of their financial assets), of which $191.4b were in resident companies and $72.8b in non-resident companies. They held $130.2b of net equity in life office reserves (24% of their financial assets); and $49.1b in bonds (9% of their financial assets), of which $25.3b were Australian bonds and $23.8b were non-resident bonds.


    Graph - Asset portfolio of life insurance corporations and pension funds at end of March quarter 2004

Financial claims between households, life insurance companies, pension funds and investment managers at end of quarter

At the end of March quarter 2004, households had claims against the reserves of life insurance corporations of $38.2b and pension funds of $561.3b. Pension funds had claims against the reserves of life insurance corporations of $130.2b. Life insurance corporations invested $138.5b of their financial assets through investment managers and pension funds invested $211.1b through investment managers.
Graphic - Financial claims between households, life insurance companies, pension funds and investment managers at end of March quarter 2004


Asset portfolio of other insurance corporations at end of quarter

The graph below shows that at the end of March quarter 2004 other insurance corporations held $26.7b in bonds (31% of total financial assets), of which $25.5b were issued domestically. Other insurance corporations held $21.5b in shares and other equity (25% of total financial assets), of which $18.7b were in resident corporations and $2.8b in non-resident corporations.

OTHER INSURANCE CORPORATIONS, ASSETS
    Graph - other insurance corporations, assets

Central borrowing authorities net issue of debt securities

Central borrowing authorities had net issue of bonds of $1.7b and a net redemption in one name paper of $0.8b in the March 2004 quarter.

CENTRAL BORROWING AUTHORITIES, NET ISSUES
    Graph - Central borrowing authorities, net issues

Financial intermediaries n.e.c. net issue of debt securities

During the March quarter 2004, financial intermediaries n.e.c. made a net issuance of bonds of $7.5b and a net issuance of short term paper of $1.2b.


FINANCIAL INTERMEDIARIES N.E.C., NET ISSUES
    Graph - Financial intermediaries n.e.c., net issues

GENERAL GOVERNMENT

Summary

During the March quarter 2004, general government transactions resulted in a net increase in financial position of $1.0b (see table 33, March Quarter 2004). National general government increased its liabilities by $4.7b during the March quarter 2004 and increased its financial assets by $3.2b to record a net change in financial position of –$1.4b. Assets increased due to a $4.7b rise in other accounts receivable, offset by a rise in other accounts payable of $3.6b. At the end of March 2004, national general
government had total liabilities of $178.0b and total financial assets of $90.8b.

Transactions in state and local general government financial assets were $4.2b in the March quarter 2004, while transactions in total liabilities were $1.7b resulting in an increase in financial position of $2.4b. At the end of the quarter, state and local general government had total liabilities of $101.9b and total financial assets of $131.1b.

Change in financial position


CHANGE IN FINANCIAL POSITION, GENERAL GOVERNMENT
    Graph - Change in financial position, general government

National government issue of debt securities

The accompanying graph illustrates the national general government’s bond issuance, with a net increase of $0.9b in treasury bonds during the quarter.

NATIONAL GENERAL GOVERNMENT, NET ISSUES
    Graph - National general government, net issues

HOUSEHOLDS

Summary

Households borrowed a total of $24.6b during the quarter in the form of loans. Deposit assets increased by $3.3b, of which bank deposits accounted for $2.3b. Net contributions to life insurance and pension fund reserves were $7.0b while net contributions to unfunded superannuation schemes were $2.3b.

Households purchased a net $4.1b in equities during the March quarter 2004, the major contributors being purchases of $1.8b of private non-financial corporation shares, $1.2b of financial intermediaries n.e.c shares and $0.9b in life insurance companies. These were offset by the sale of $0.2b of other insurance corporations shares.

At the close of the quarter, households' stock of financial assets was $1,438.8b. This was up $31.3b from the revised previous quarter number, following net transactions of $13.4b and valuation increases of $17.9b. Major asset holdings were net equity in reserves of life insurance corporations and pension funds of $599.5b, currency and deposits of $346.2b, equities of $259.7b, and unfunded superannuation claims of $145.9b.

Household net borrowing and debt to liquid asset ratio

Of the net $24.6b borrowed by households, bank loans accounted for $10.9b and these were mainly for the purpose of housing. Of the bank housing loans, $3.3b were borrowed for owner occupied housing and $3.7b for investment housing. This borrowing raised household bank loan liabilities to $543.8b and total household liabilities to $766.2b at the end of the quarter. The graph below illustrates that the debt to liquid asset ratio at 31 March 2004 was 120.1%, an increase of 1% from the revised December quarter ratio. During the March quarter, the ratio was influenced by an overall increase of 3% in household borrowing for the quarter and a 3% increase in liquid assets, of which the major contributors were deposits and equities.


HOUSEHOLD DEBT/LIQUID ASSETS RATIO
    Graph - Household debt/liquid assets ratio

Insurance and pension claims

During the March quarter 2004, households' net equity in reserves of pension funds increased $19.0b, made up of $10.1b net contributions and $8.9b valuation increases, bringing household net equity in pension funds to $561.3b. Net equity in reserves of life insurance corporations decreased by $2.8b, made up of $3.1b net withdrawals and $0.3b valuation increases, bringing the household net equity in life insurance to $38.2b. Households' unfunded superannuation claims increased by $2.3b during the quarter. Prepayments of premiums and claims against reserves in general insurance corporations decreased by $0.2b.


REST OF THE WORLD

Summary

Non-residents invested a net $24.4b in Australian financial assets during the March quarter 2004. There were purchases of bonds of $25.5b (of which $10.4b were issued by financial intermediaries n.e.c and $10.2 by banks), purchases of equities of $7.2b (of which $4.5b were issued by other depository corporations) and purchases of bills of exchange of $1.0b. These were offset by non-residents reducing their holding of derivative contracts by $4.4b, currency and deposits ($2.6b), borrowings through loans and placements ($1.0b) and holdings of one name paper ($0.9b). Overall, the value of Australian financial assets held by non-residents at the end of the quarter was up $27.1b from the December quarter, including $2.7b in valuation increases. Australian residents purchased foreign financial assets worth $14.3b during the March quarter 2004. There were resident purchases of bonds ($6.4b) and equities ($4.7b), transactions of currency and deposits ($4.4b) and loans and placements ($2.5b) and the purchase of one name paper ($1.0b). These were offset by residents reducing their holdings of derivative contracts by $4.1b. Overall, the total value of foreign assets held by Australian residents increased to $549.0b at the end of the quarter.

Net purchases of equities

The accompanying graph shows that during the March quarter 2004 non-residents purchased a net $7.2b in equities, a decrease of $3.2b compared with the December quarter 2003.


NET PURCHASES OF EQUITIES BY NON-RESIDENTS
    Graph - Net purchases of equities by non-residents

Net purchases of bonds

The accompanying graph shows that non-residents purchased $25.5b of Australian bonds during the March quarter 2004, an increase of $15.5b compared with the December quarter 2003.

NET PURCHASES OF BONDS BY NON-RESIDENTS
    Graph - Net purchases of bonds by non-residents

Bookmark and Share. Opens in a new window

Commonwealth of Australia 2014

Unless otherwise noted, content on this website is licensed under a Creative Commons Attribution 2.5 Australia Licence together with any terms, conditions and exclusions as set out in the website Copyright notice. For permission to do anything beyond the scope of this licence and copyright terms contact us.