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5232.0 - Australian National Accounts: Financial Accounts, Jun 2011 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 30/09/2011   
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SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Other private non-financial corporations borrowed a net $22.9b (excluding derivatives and accounts payable) during the June quarter 2011. They issued $9.8b in shares and other equities, borrowed $7.3b in loans and issued $7.0b in bonds. There was a net redemption of short term debt securities during the quarter of $0.3b. These transactions resulted in total borrowings outstanding of $912.0b and total equity on issue of $1,068.9b.

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 June quarter 2011, private non-financial investment funds had net issuance of $1.5b in equity and net maturities of $3.9b in bonds. This was offset by net issuance of one name paper of $0.5b and loans of $5.5b. Total liabilities of national public non-financial corporations increased by $1.2b to $14.5b. Liabilities of state and local public non-financial corporations increased by $2.6b to $195.9b.


PRIVATE NON-FINANCIAL CORPORATIONS DEBT TO EQUITY RATIO

From the end of June 2009 to the end of June 2011, the value of equity on issue increased by $212.6b and the value of debt outstanding decreased by $37.8b. During the June quarter 2011, private non-financial corporation debt decreased by $3.8b and equities on issue decreased by $62.8b. The original debt to equity ratio decreased from 0.77 to 0.81 and the adjusted ratio decreased from 1.04 to 1.03. 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
Mar Qtr 2011
Jun Qtr 2011
Jun Qtr 2011
Jun Qtr 2011
$b
$b
$b
$b

Assets of Financial corporations
Central bank
69.1
4.0
0.5
73.7
Banks
2 323.6
30.0
5.1
2 358.7
Other depository corporations
301.9
-6.0
4.0
299.9
Pension funds
1 154.5
17.4
-37.8
1 134.1
Life insurance corporations
244.0
-1.4
-3.8
238.8
Non-life insurance corporations
139.0
5.6
-1.5
143.0
Money market financial investment funds
23.4
-0.5
-
22.9
Non-money market financial investment funds
300.9
-0.9
-8.0
292.1
Central borrowing authorities
256.7
5.0
4.0
265.7
Securitisers
266.4
5.8
-
272.2
Other financial corporations
106.7
-1.9
-3.6
101.3
Liabilities of Financial corporations
Central bank
69.1
6.5
-0.5
75.0
Banks
2 408.7
24.9
-13.4
2 420.1
Other depository corporations
361.2
-17.0
4.8
349.0
Pension funds
1 228.3
20.0
-37.4
1 210.9
Life insurance corporations
255.2
-2.1
-7.2
245.9
Non-life insurance corporations
163.6
8.1
-1.2
170.6
Money market financial investment funds
25.2
-0.4
-
24.7
Non-money market financial investment funds
308.6
1.1
-5.9
303.8
Central borrowing authorities
264.3
0.9
1.9
267.1
Securitisers
262.4
0.8
5.2
268.4
Other financial corporations
77.3
2.2
-1.6
77.8

- nil or rounded to zero (including null cells)



Summary

During the June quarter 2011, financial corporations had $45.0b of liability transactions on a consolidated basis. The liability transactions were: banks, $24.9b; pension funds, $20.0b; non-life insurance corporations, $8.1b; central bank, $6.5b; other financial corporations, $2.2b; non-money market investment funds, $1.1b; central borrowing authorities, $0.9b; securitisers, $0.8b; money market investment funds, -$0.4b; life insurance corporations, -$2.1b; and other depository corporations, -$17.0b.


Banks

Transactions of financial assets of banks were net $30.0b during the quarter. Major transactions in bank assets holdings were: Derivative holdings, net -$12.5b of which -$8.3b was issued by the rest of world; Deposit holdings, net -$7.6b of which -$6.0b were accepted by other depository corporations. These net decreases were offset by Loans and placements which rose $37.8b of which $23.4b was borrowed by households and $19.0b by the rest of world. Bond holding, net $10.3b of which $7.1b was issued by central borrowing authorities and $3.8b by the national general government.

During the quarter, liability transactions of banks were $24.9b with the main contributors being deposits of $36.0b, long term loans and placements of $4.5b and one name paper issuance offshore of $3.6b. These were offset by derivative settlements of $21.4b.


Other depository corporations

Transactions of other depository corporations assets during the quarter were net -$6.0b. The main contributors to this decrease were derivative settlements of -$7.6b and redemption of loans worth -$3.2b. These were partially offset by issuance of one name paper of $3.5b.

Transactions of other depository corporations liabilities were net -$17.0b during the June quarter 2011. Main contributors to this decrease were deposits of -$12.4b and derivatives -$7.8b. These decreases were partially offset by bonds issued in Australia worth $1.2b and other accounts payable of $1.2b.


Pension funds

Net equity in reserves of pension funds was $1,205.0b at the end of the June quarter 2011, a decrease of $17.0b. This follows net transactions of $20.2b and valuation decrease of $37.2b during the quarter. Asset holdings decreased by $20.4b to $1,134.1b following net transactions of $17.4b and valuation decrease of $37.8b.


Life insurance corporations

At the end of June quarter 2011, the financial assets of life insurance corporations were $238.8b, a decrease of $5.2b since March quarter 2011. Net transactions were -$1.4b and there was a valuation decrease of $3.8b. During the quarter, Pension funds' claims against the reserves of life offices decreased by $2.0b following net transactions of $2.6b and a valuation decrease of $4.6b.

Households' claims against the reserves of life offices decreased by $4.4b following net transactions of -$2.9b and a valuation decrease of $1.5b.


Non-life insurance corporations

Net transactions of financial assets of non-life insurance corporations were $5.6b during the June quarter 2011. The main contributor to this increase is other accounts receivable which increased $6.3b. During the June quarter, net liability transactions of non-life corporations were $8.1b, driven by long term loans and placements of $3.1b, short term loans and placements totalling $2.5b, and net prepayments of premiums and reserves worth $1.7b.


Money market investment funds

Total assets of money market investment funds was $22.9b at the end of the June quarter 2011, of which $14.9b was in terms of one name paper and $5.8b in deposits. During the quarter, total unlisted equities issued by money market investment funds decreased by $0.5b to $24.6b.


Non money market investment funds

Total assets transactions of non money market investment funds during June quarter 2011 was -$0.9b, of which -2.36 was in holdings of equities. This decrease was offset by an increase in net issuance of one name paper worth $1.7b and bonds etc totalling $1.1b. At the end of the quarter, total liabilities of non money market investment funds were $303.8b, a decrease of $4.8b from the previous quarter.


Central borrowing authorities

Total liabilities of central borrowing authorities was $267.1b at the end of the June quarter 2011. During the quarter, the authorities borrowed $3.0b in loans and placements and issued $0.3b in bonds. These were offset by net settlement of derivatives of $1.5b. Net asset transactions during the quarter were 5.0b, the main contributors being loans and of placements $8.2b and deposits of $4.7b . These increases were offset by derivative settlements of $2.4b, and maturities of bills of exchange $2.6b and one name paper $2.0b.


Securitisers

At the end of the June quarter 2011, net liabilities of securitisers were $268.4b, with bonds on issue of $242.9b, one name paper of $14.6b and loans and placements of $8.7b. Net assets of securitisers were $272.2b with the major assets in loans and placements of $267.6b and deposit holdings of $3.7b.


Net flow of deposits to banks

Transactions in transferable deposit liabilities of banks during the June quarter 2011 were net $13.4b. The major deposit contributors where other private non-financial corporations $9.1b, central borrowing authorities $4.1b and pension funds $3.4b. These where slightly offset by withdrawals from the rest of the world -$3.3b and banks -$1.6b.

Transactions in other deposits liabilities of banks during the quarter were $20.8b of which $14.5b were deposited by rest of world, $4.6b by pension funds and $3.6b by other private non-financial corporations.

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 June quarter 2011, pension funds held $619.3b in shares and other equity (54.6% of their financial assets), of which $429.8b was in resident companies and $189.5b was in non-resident companies. They held 164.2b of the net equity in life office reserves (14.5% of their financial assets) and $113.5b in bonds (10.0% of their financial assets), of which $65.2b were bonds issued by domestic institutions and $48.3b were bonds issued by non-residents.

At the end of the June quarter 2011, life insurance corporations held $24.7b in bonds (10.3% of their financial assets), of which $21.8b was in bonds issued by domestic institutions and $2.9b in bonds issued by non-residents.

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



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

At the end of the June quarter 2011, households had claims against the reserves of pension funds of $1,203.8b and life insurance corporations of $53.2b. Rest of world had net equity in reserves of pension funds of $1.3b and life insurance corporations of $0.9b. Pension funds had claims against the reserves of life insurance corporations of $164.2b. Life insurance corporations invested $130.0b through fund managers, and pension funds invested $532.5b through investment managers.

Diagram: Financial claims between households, pension funds, life insurance corporations, 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 June quarter 2011, non-life insurance corporations held $41.6b in bonds (29.1% of their financial assets), of which $37.4b was issued by resident corporations, and $4.2b was issued by non-residents. They also held $13.9b in deposits (9.7% 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 June quarter 2011, central borrowing authorities issued $0.2b one name paper, and reclaimed $0.3b in bonds.

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 June quarter 2011, securitisers issued $0.5b in one name paper and $0.9b in bonds.

NET ISSUE OF DEBT SECURITIES, Securitisers
Graph: NET ISSUE OF DEBT SECURITIES, Securitisers



GENERAL GOVERNMENT

Summary

During the June quarter 2011, consolidated general government transactions resulted in a net change in financial position of -$14.4b.

The net change in financial position for national general government was $0.8b. The liability transactions of national general government during the quarter were $7.4b, with the main contributors being bonds issued in Australia of $5.5b, one name paper issued in Australia of $1.4b, and accounts payable of $1.4b. This was partially offset by derivatives settlements of $1.6b. During the quarter, asset transactions for national general government were $8.2b, with the main contributors being equity issues of $5.0b; deposits of $4.8b and other accounts receivable of $4.1b. This was offset by settlement of derivatives worth $4.6b and bonds maturities of $3.4b. At the end of the quarter, national general government had total liabilities of $407.8b and total financial assets of $240.5b.

Transactions in state and local general government financial assets were -$1.1b in June quarter 2011, with the main contributors being reductions in equity of state and local public non-financial corporations of $1.8b, deposits accepted by banks of $0.6b, and loans and placements borrowed by other private non-financial corporations of -$0.9b. This was offset by loans and placements borrowed by central borrowing authorities of $2.3b. Transactions in total liabilities were $14.0b, with the main contributors being long term loans and placements of $6.7b, short term loans and placements of $4.1b and unfunded superannuation claims of $2.2b. These transactions resulted in a net change in financial position of -$15.2b. At the end of the quarter, state and local general government had total liabilities of $223.9b and total financial assets of $179.7b.


Change in financial position
CHANGE IN FINANCIAL POSITION, General government
Graph: CHANGE IN FINANCIAL POSITION, General government



National government net issue of debt securities

The graph below illustrates the national general government’s debt security issuance. The net issuance of treasury bonds was $5.5b during the quarter.

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



HOUSEHOLDS

Summary

Households' change in financial position was -$3.5b during the June quarter 2011. During the quarter, households borrowed a total of $27.6b in the form of loans. On the asset side, net contributions to life insurance and pension fund reserves were $17.3b. Householders' transactions in deposits were $1.8b, other accounts receivable transactions were $4.6b, while net claims on unfunded superannuation were $2.8b. These were offset by sales of equities of $4.9b.

At the end of the quarter, households' stock of financial assets was $2,602.3b. This was a decrease of $26.3b from the previous quarter, following net transactions of $22.4b and valuation decrease of $48.7b. Major asset holdings were net equity in reserves of $1,261.7b, deposits of $645.7b, equities of $261.9b and unfunded superannuation claims of $262.6b.


Household net borrowing and debt to liquid asset ratio

Of the net $27.6b loans borrowed by households during the June quarter 2011, bank loans accounted for $23.4b, loans from securitisers accounted for $5.2b, and $1.7b from state and local public non-financial corporations. These were offset by net loan repayments of $0.2b to other financial corporations and $0.2b to national general government.

The graph below illustrates that the debt to liquid assets ratio at the end of June 2011 was at 169.8%, an increase of 6.1 percentage points on revised March 2011 data. The ratio was influenced by an increase of 2.3% in total outstanding household borrowings and a decrease in total liquid assets of 1.4%. The major contributor to the decrease in liquid assets was equities which fell by 5.5%.

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



Insurance and pension claims

During the June quarter 2011, households' net equity in reserves of pension funds decreased by $17.0b, made up of $20.2b in transactions and $37.2b in valuation decreases, bringing household net equity in pension funds to $1,203.8b. Net equity in reserves of life insurance corporations decreased by $4.4b, made up of -$2.9b transactions and $1.5b valuation decreases, bringing the household net equity in life insurance to $53.2b. Net transactions in households' unfunded superannuation claims were $2.8b and prepayments of premiums and claims against reserves in non life insurance corporations were $47.3b during the quarter.


REST OF THE WORLD

Summary

Non-residents had net transactions of $34.6b in Australian financial assets during the June quarter 2011 and a valuation decrease of $29.6b, resulting in $2,034.2b of Australian financial assets being held by non-residents, up $5b from the revised March quarter 2011. The main contributors were issuance of loans of $19.9b, net purchases of equities of $14.6b, of which $11.1b was issued by other private non-financial corporations and net of deposits $11.6b, of which $11.2b was accepted by Banks. These were partly offset by settlement of derivatives of $16.0b and a decrease in accounts receivable of $10.2b.

Australian residents had net transactions of $29.5b in foreign financial liabilities during the June quarter 2011. The main contributors were short-term loan repayments of $11.3b, unlisted shares and other equity of $10.9b, other accounts payable of $7.4b and deposits of $5.0b. These were partly offset by derivatives settlements of $11.8b. The total value of foreign assets held by Australian residents increased to $1,253.1b at the end of the quarter, $6.2b higher than in March 2011. Of this, $23.3b were valuation decreases.


Net purchases of equities

During the June quarter 2011, non-residents acquired a net $14.6b in equities, an increase of $22.5b compared with the March quarter 2011 estimate.

NET PURCHASES OF EQUITY
Graph: NET PURCHASES OF EQUITY



Net purchases of bonds

Non-residents acquired $7.6b of Australian bonds during the June quarter 2011, a decrease of $13.3b compared with the March quarter 2011 estimate.

NET PURCHASES OF BONDS
Graph: NET PURCHASES OF BONDS



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