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5232.0 - Australian National Accounts: Financial Accounts, Dec 2009  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 26/03/2010   
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SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Other private non-financial corporations repaid a net $1.8b (excluding derivatives and accounts payable) during the December quarter 2009. They repaid $30.1b in loans and issued $27.1b in shares and other equities. Net issuance of debt securities during the quarter was $1.2b. These transactions resulted in total borrowings outstanding of $796.1b and total equity on issue of $1,058.9b

Other private non-financial corporations, Net issue of equity and borrowing
Graph: Other private non-financial corporations, Net issue of equity and borrowing


During the December quarter 2009, private non-financial investment funds raised $2.1b in equity and issued $0.2b in bonds. Total liabilities of national public non-financial corporations increased by $0.6b to $13.3b. Liabilities of state and local public non-financial corporations increased by $3.5b to $142.4.


Private non-financial debt to equity ratio

From the end of December 2007 to the end of December 2009, the value of equity on issue decreased by $168.6b whereas the value of debt outstanding rose by $40.7b. During the December quarter 2009, private non-financial corporation debt decreased by $34.2b and while equities on issue increased by $55.5b. The original debt to equity ratio decreased from 0.90 to 0.83 and the adjusted ratio decreased from 1.18 to 1.11. The adjusted ratio reflects the removal of price change from the original series.

Private non-financial debt to Equity ratio, June 1995 Base
Graph: Private non–financial debt to Equity ratio, June 1995 Base



FINANCIAL CORPORATIONS

Assets and liabilities of Financial corporations

Outstanding at end
Transactions during
Other changes during
Outstanding at end
Sep Qtr 2009
Dec Qtr 2009
Dec Qtr 2009
Dec Qtr 2009
$b
$b
$b
$b

Assets of Financial corporations
Central bank
84.0
0.2
-0.6
83.6
Banks
2 163.4
43.3
-24.1
2 182.6
Other depository corporations
316.8
-17.2
-6.5
293.1
Pension funds
1 005.4
21.7
7.9
1 035.0
Life insurance corporations
254.0
2.4
-
256.3
Non-life insurance corporations
120.2
2.1
-1.5
120.8
Money market financial investment funds
39.0
-4.1
-
34.9
Non-money market financial investment funds
243.8
11.1
-7.6
247.3
Central borrowing authorities
192.4
6.5
-1.7
197.2
Securitisers
311.6
-14.3
-
297.3
Other financial corporations
103.7
7.6
-2.5
108.8
Liabilities of Financial corporations
Central bank
85.4
0.3
-1.1
84.6
Banks
2 314.4
61.7
-39.2
2 337.0
Other depository corporations
336.2
-18.1
-2.2
315.9
Pension funds
1 072.4
25.2
8.1
1 105.7
Life insurance corporations
275.6
2.3
4.9
282.8
Non-life insurance corporations
158.6
-1.1
0.6
158.2
Money market financial investment funds
43.4
-4.5
-0.3
38.7
Non-money market financial investment funds
232.4
7.5
2.7
242.5
Central borrowing authorities
179.2
9.3
-2.5
185.9
Securitisers
310.1
-19.9
5.1
295.3
Other financial corporations
80.6
0.1
0.5
81.2

- nil or rounded to zero (including null cells)



Summary

During the December quarter 2009, financial corporations had $68.6b of liability transactions on a consolidated basis. The liability transactions were: Central bank, $0.3b; banks, $61.7b; other depository corporations, -$18.1b; pension funds, $25.2b; life insurance corporations, $2.3b; non-life insurance corporations, -$1.1b; money market investment funds, -$4.5b; non-money market investment funds, $7.5b; central borrowing authorities, $9.3b; securitisers, -$19.9b and other financial corporations $0.1b.


Banks

Transactions of financial assets of banks were net $43.3b during the quarter. Major transactions in bank assets holdings were: loans, net $35.7b, of which $41.2b were lent to households and $2.4b were repaid by other private non-financial corporations; bonds, net $8.0b of which $5.2b were issued by securitisers; deposits, net $3.8b of which $8.9b accepted by rest of the world and $7.5b were withdrawn from other depository corporations; derivatives, net -$14.9b, of which $9.9b were settled by the rest of the world.

During the quarter, liability transactions of banks were bond issuance of $47.7b, of which $37.1b were issued offshore, drawdown of loans of $14.7b, deposits of $12.4b and equities issuance of $7.4b. These were offset by net settlements of derivatives of $20.7b


Other depository corporations

Transactions of other depository corporations liabilities were net -$18.1b during the December quarter 2009. Main contributors were derivatives of -$8.2b, deposits of -$8.0b, bonds of -$1.1b, loans of -$0.7b and one name paper of $0.4b.

Transactions of assets during the quarter were net -$17.2b. The main contributors were the settlement of derivative contracts, net $8.1b, maturities of loans, net $3.7b, withdrawal of deposits, net $1.7b and sales of bonds, net $1.2b.


Pension funds

Net equity in reserves of pension funds was $1,099.8b at the end of the December quarter 2009, an increase of $33.9b. This follows net transactions of $25.8b and valuation increases of $8.1b during the quarter. Asset holdings increased by $29.6b to $1,035.0b following net transactions of $21.7b and valuation increases of $7.9b.


Life insurance corporations

At the end of December quarter 2009, the financial assets of life insurance corporations were $256.3b, an increase of $2.3b from the previous quarter. Net transactions were $2.4b and valuation decreases were $0.1b. During the quarter, there were increases in equity holdings of $2.5b and loans of $0.8b. This was offset by sales of bill of exchange in the amounts of $0.8b and one name paper in the amounts of $0.7b. Pension fund claims against the reserves of life offices increased by $3.6b following net transactions of $3.1b and valuation increases of $0.5b.

Households' claims against the reserves of life offices decreased by $1.0b following net transactions of -$1.3b and valuation increases of $0.3b.


Non-life insurance corporations

Net transactions of financial assets of non-life insurance corporations were to $2.1b during the December quarter 2009. The main contributors was bonds of $2.6b and one name paper of $0.6b. This was offset by maturities of loans of $0.6b. During the December quarter, net liability transactions of non-life insurance corporations were -$1.1b, driven mainly by other accounts payable of -$0.8b and prepayments of premiums and reserves of -$0.6b


Money market investment funds

Total assets of money market investment funds was $34.9b at the end of the December quarter 2009, of which $25.5b was invested in one name paper, $4.2b in deposits and $3.4b in bills of exchange. During the quarter, total unlisted equities issued by money market investment funds decreased by $4.8b to $38.6b.


Non money market investment funds

Total assets of money market investment funds was $34.9b at the end of the December quarter 2009, of which $25.5b was invested in one name paper, $4.2b in deposits and $3.4b in bills of exchange. During the quarter, total unlisted equities issued by money market investment funds decreased by $4.8b to $38.6b.


Central borrowing authorities

Total liabilities of central borrowing authorities was $185.9b at the end of the December quarter 2009. During the quarter, the authorities issued bonds of $6.5b and one name paper of $5.0b. Net asset transactions during the quarter were $6.5b, the main contributors being issuance of loans of $4.8b, purchases of bonds of $2.8b and deposits of $2.8b. These were offset by net settlement of derivatives, $2.5b and sales of bills of exchange, $1.3b.


Securitisers

At the end of the December quarter 2009, net liabilities of securitisers were $295.3b, with bonds on issue of $263.9b, and one name paper of $21.2b. Net assets of securitisers were $297.3b with the major assets in loans and placement, $288.5b and deposits, $4.6b.


Net flow of deposits to banks

Transactions in transferable deposit liabilities of banks during the December quarter 2009 were net -$6.0b. There were transactions in transferable deposit assets of other private non-financial corporations of $2.3b. This was offset by withdrawals by households, $2.6b, national general government, $2.3b, and banks, $2.0b. Transactions in other deposits liabilities of banks during the quarter were $16.0b of which $5.5b were deposited by other private non-financial corporations, $2.4b by central borrowing authorities, $11.5b by households.

Currency and deposits liabilities, Banks
Graph: Currency and deposits liabilities, Banks



Financial asset portfolio of life insurance corporations and pension funds at end of quarter

At the end of the December quarter 2009, pension funds held $542.7b in shares and other equity (52.4% of their financial assets), of which $387.2b was in resident companies and $155.5b was in non-resident companies. They held $165.0b of the net equity in life office reserves (15.9% of their financial assets); and $108.4b in bonds (10.5% of their financial assets), of which $63.2b were bonds issued by domestic institutions and $45.2b were bonds issued by non-residents.

At the end of the December quarter 2009, life insurance corporations held $194.6b in shares and other equity (75.9% of their financial assets), of which $171.1b was in resident companies and $23.5b was in non-resident companies; $30.3b in bonds (11.8% of their financial assets), of which $23.3b was in bonds issued by domestic institutions and $7.0b in bonds issued by non-residents; $9.5b in deposits (3.7% of their financial assets) and $8.8b in short term securities (3.4% of their financial assets).

Assets of pension funds and life insurance corps.
Graph: Assets of pension funds and life insurance corps.



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

At the end of the December quarter 2009, households had claims against the reserves of pension funds of $1,098.8b and life insurance corporations of $72.2b. Pension funds had claims against the reserves of life insurance corporations of $165.0b. Life insurance corporations invested $133.7b through fund managers, and pension funds invested $481.8b through investment managers.

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


Financial asset portfolio of non-life insurance corporations at end of quarter

The graph below shows that at the end of the December quarter 2009, non-life insurance corporations held $40.5b in shares and other equity (33.5% of their financial assets), of which $28.2b was in resident corporations; $41.3b in bonds (34.2% of their financial assets), of which $37.1b was issued by resident corporations; $14.3b in deposits (11.8% of total financial assets) and $8.3b of short-term securities (6.9% of total financial assets).

Assets of non-life insurance corps.
Graph: Assets of non-life insurance corps.



Central borrowing authorities net issue of debt securities

During the December quarter 2009, central borrowing authorities issued bonds of $6.5b and issued one name paper of $5.0b.

Net issue of debt securities, Central borrowing authorities
Graph: Net issue of debt securities, Central borrowing authorities



Securitisers' net issue of debt securities

During the December quarter 2009, securitisers had net redemptions of bonds of $14.4b and net redemptions of one name paper of $4.6b.

Net issue of debt securities, Securitisers
Graph: Net issue of debt securities, Securitisers



GENERAL GOVERNMENT

Summary

During the December quarter 2009, consolidated general government transactions resulted in a net change in financial position of -$12.2b.

The net change in financial position for national general government was -$11.9b. The liability transactions of national general government during the quarter were $15.0b, with the main contributor being bonds issued in Australia of $15.0b. This was partially offset by settlements of derivatives of $1.2b and redemptions of one name paper of $1.0b. During the quarter asset transactions for national general government were $3.1b, with the main contributors being other accounts receivable of $13.0b, equities of $6.4b and bonds of $3.4b. These were offset by sales of one name paper of $10.6b, withdrawal of deposits of $6.5b and settlement of derivatives of $3.1b. At the end of the quarter, national general government had total liabilities of $313.3b and total financial assets of $250.2b.


Change in financial position

Transactions in state and local general government financial assets were $0.3b in the December quarter 2009, while transactions in total liabilities were $0.6b, resulting in a change in financial position of -$0.4b. At the end of the quarter, state and local general government had total liabilities of $151.0b and total financial assets of $87.3b.

Change in financial position, General government
Graph: Change in financial position, General government



National government net issue of long term debt securities

The graph below illustrates the national general government’s debt security issuance. The net issuance of treasury bonds was $15.0b during the quarter.

Net Issue of long term debt securities, National general government
Graph: Net Issue of long term debt securities, National general government



HOUSEHOLDS

Summary

Households' change in financial position was $0.9b during the December quarter 2009. During the quarter, households borrowed a total of $28.2b in the form of loans. On the asset side, householders' transactions in deposits were $8.9b. Net contributions to life insurance and pension fund reserves were $24.6b while net claims on unfunded superannuation were $2.1b. These were offset by reductions in other accounts receivable of $7.2b and sales in equities of $2.0b.

At the close of the quarter, households' stock of financial assets was $2,437.5b. This was an increase of $45.4b from the previous quarter, following net transactions of $26.4b and valuation increases of $19.0b. Major asset holdings were net equity in reserves $1,179.3b, currency and deposits of $600.9b, equities of $322.1b and unfunded superannuation claims of $202.5b.


Household net borrowing and debt to liquid asset ratio

Of the net $28.2b loans borrowed by households during the December quarter 2009, bank loans accounted for $41.2 and other depository corporations, $1.7b. These were offset by the net repayment of $14.5b loans to securitisers. For details on the ABS treatment of internal securitisation, refer to page 6 of the December quarter 2008 publication.

The graph below illustrates that the debt to liquid assets ratio at the end of December 2009 was at 151.4%, a decrease of 0.5 percentage points on revised September 2009 data. The ratio was influenced by an increase of 1.2% in total household borrowings and an increase in total liquid assets of 1.5%. The major contributors to the increase in liquid assets were one name paper, up 9.3%, deposits, up 1.6% and equities, up 1.4%. These were offset by a decrease in holdings of bills of exchange of 2.0%.

Household Debt to liquid assets ratio
Graph: Household Debt to liquid assets ratio



Insurance and pension claims

During the December quarter 2009, households' net equity in reserves of pension funds increased by $33.9b, made up of $25.8b in transactions and $8.1b in valuation increases, bringing household net equity in pension funds to $1,098.8b. Net equity in reserves of life insurance corporations decreased by $1.0b, made up of -$1.3b transactions and $0.3b valuation increases, bringing the household net equity in life insurance to $72.2b. Net transactions in households' unfunded superannuation claims were $2.1b and prepayments of premiums and claims against reserves in non-life insurance corporations were -$0.3b during the quarter.


REST OF THE WORLD

Summary

Non-residents had net transactions of $48.9b in Australian financial assets during the December quarter 2009, resulting in $1,927.7b of Australian financial assets being held by non-residents, up $36.9b from the September quarter 2009. Valuation decreases were $12.0b. The main contributors were net purchases of bonds, $58.8b, of which $40.8b was issued by banks. Net purchases of equities was $9.6b of which $7.5b was issued by other private non-financial corporations. These were offset by net settlement of derivatives of $14.3b and repayment of loans and placements of $8.2b.

Australian residents had net transactions of $30.9b in foreign financial assets during the December quarter 2009. The total value of foreign assets held by Australian residents increased to $1,159.1b at the end of the quarter. Of this, $6.3b were valuation decreases. The main contributors were purchases of unlisted shares and other equity, $22.8b and deposits, $17.2b. These were offset by redemptions of one name paper of $13.3b and settlement of derivatives of $12.1b.


Net purchases of equities

During the December quarter 2009, non-residents acquired a net $9.6b in equities, a decrease of $19.5b compared with the September quarter 2009 estimate.

Net purchases of equity
Graph: Net purchases of equity



Net purchases of bonds

Non-residents acquired $58.8b of Australian bonds during the December quarter 2009, an increase of $37.0b compared with the September quarter 2009 estimate.

Net purchases of bonds
Graph: Net purchases of bonds



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