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5232.0 - Australian National Accounts: Financial Accounts, Jun 2012 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/09/2012   
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SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Other private non-financial corporations borrowed a net $25.4b (excluding derivatives and accounts payable) during the June quarter 2012. They borrowed $10.9b in loans, had net issuance of $15.4b in shares and other equities and $3.2b in bonds. This was slightly offset by a reduction in one name paper of $2.9b. These transactions resulted in total borrowings outstanding of $2,109.2b (excluding derivatives and accounts payable) and total equity on issue of $1,245.9b.

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 2012, private non-financial investment funds had net redemptions of $0.6b in bonds and $0.3b in loans. Total liabilities of national public non-financial corporations decreased by $0.1b to $16.0b, the largest contributor being decreased loan liabilities worth $0.2b. Liabilities of state and local public non-financial corporations increased by $3.7b to $205.4b, with net transactions of $3.3b.


PRIVATE NON-FINANCIAL CORPORATIONS DEBT TO EQUITY RATIO

From the end of June 2010 to the end of June 2012, the value of equity on issue increased by $288.8b and the value of debt outstanding increased by $62.9b. During the June quarter 2012, private non-financial corporation equity on issue increased by $250.0b and debt increased by $30.6b. The original debt to equity ratio decreased from 0.90% to 0.76% and the adjusted ratio remained steady at 1.01. 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 2012
Jun Qtr 2012
Jun Qtr 2012
Jun Qtr 2012
$b
$b
$b
$b

Assets of Financial corporations
Central bank
85.5
-6.8
0.9
79.7
Banks
2 460.4
17.4
48.8
2 526.7
Other depository corporations
290.8
0.4
12.4
303.6
Pension funds
1 297.0
44.3
-44.8
1 296.5
Life insurance corporations
239.6
1.9
-2.4
239.1
Non-life insurance corporations
152.2
3.2
-0.6
154.8
Money market financial investment funds
25.1
0.4
-
25.5
Non-money market financial investment funds
229.3
-3.5
-7.4
218.4
Central borrowing authorities
297.8
14.0
1.1
312.9
Securitisers
304.5
-0.9
-
303.6
Other financial corporations
84.0
0.1
-3.5
80.5
Liabilities of Financial corporations
Central bank
85.8
-7.1
1.0
79.7
Banks
2 522.9
31.9
30.5
2 585.2
Other depository corporations
306.7
-4.8
12.6
314.5
Pension funds
1 379.8
38.2
-40.6
1 377.5
Life insurance corporations
241.0
2.0
-3.1
239.9
Non-life insurance corporations
167.2
2.5
-2.1
167.7
Money market financial investment funds
25.1
-0.1
0.6
25.5
Non-money market financial investment funds
372.5
10.7
-8.2
375.0
Central borrowing authorities
297.3
4.9
8.4
310.6
Securitisers
300.5
-12.1
11.1
299.6
Other financial corporations
74.7
-0.2
-1.7
72.9

- nil or rounded to zero (including null cells)



Summary

During the June quarter 2012, financial corporations had $65.9b of liability transactions on a consolidated basis. The positive liability transactions were pension funds $38.2b, banks $31.9b, non-money market financial investment funds $10.7b, central borrowing authorities $4.9b, non-life insurance corporations $2.5b and life insurance corporations $2.0b. These were offset by negative liability transactions in securitisers $12.1b, central bank $7.1b, other depository corporations $4.8b, other financial corporations $0.2b and money market investment funds $0.1b.


Banks

Transactions of financial assets of banks were net $17.4b during the quarter. Major transactions in bank assets were increases in loans and placements of $32.7b, of which contributors were households $23.3b and other private non-financial corporations $11.7b. This was partly offset by decreases in bond holdings worth $8.8b, of which $11.0b was redeemed by securitisers. During the quarter, net liability transactions of banks were $31.9b, of which $49.3b were in deposits. This was mainly offset by one name paper redemptions in Australia $7.5b, bonds redemptions offshore $4.4b, acceptances of bills of exchange $3.7b and repayments of short term loans and placements $3.5b.


Other depository corporations

Other depository corporations net transactions of financial assets were $0.4b in June quarter 2012. The main contributors to this increase were bonds issued by central borrowing authorities $1.6b and deposits accepted by banks $1.0b. These increases were offset by loans and placements repaid by other private non-financial corporations $1.1b.

The net liability transactions of other depository corporations were -$4.8b during June quarter 2012. The main contributors to this decrease were other accounts payable $3.2b and deposits of $1.8b


Pension funds

Net transactions of total financial assets of pension funds were $44.3b in June quarter 2012. The main contributor to this increase were equities issued, with net transactions of $32.7b, of which $13.3b was issued by other private non-financial corporations, $11.6b was issued by non-money market financial investment funds and $7.8b was issued by rest of world. Another major contributor to this increase was deposits, with net transactions of $12.0b, of which $12.8b was accepted by banks. Net equity in reserves of pension funds was $1,373.5b at the end of June quarter 2012, a decrease of $0.6b from the previous quarter. This follows net transactions of $41.0b and valuation decreases of $41.6b. Asset holdings decreased by $0.5b to $1,296.5b, following net transactions of $44.3b and valuation decreases of $44.8b.

Households' claims against the reserves of pension funds decreased by $0.5b to $1,372.2b, following transactions of $40.9b and valuation decreases of $41.4b.


Life insurance corporations

At the end of June quarter 2012, the financial assets outstanding of life insurance corporations were $239.1b, a decrease $0.5b from the previous quarter. Net asset transactions were $1.9b, and valuation decreases $2.4b. During the quarter, pension funds' claims against the reserves of life offices decreased by $3.2b to $163.7b, following net transactions of -$2.5b and valuation decreases of $0.7b.

Households' claims against the reserves of life offices increased by $3.5b to $54.2b, following net transactions of $3.7b and valuation decreases of $0.2b.


Non-life insurance corporations

Net transactions of financial assets of non-life insurance corporations were $3.2b for June quarter 2012. During the quarter net liability transactions of non-life insurance corporations were $2.5b, driven by prepayments of premiums and reserves of $4.3b.


Money market financial investment funds

Total assets of money market financial investment funds were $25.5b at the end of June quarter 2012, of which $14.1b was in holdings of one name paper ($12.2b was issued by banks), and $7.5b of deposits. During the quarter total unlisted equities issued by money market investment funds increased by $0.6b to $25.5b, with net transactions of zero. Net transactions of total financial assets of money market financial investment funds were $0.4b for the quarter, driven by an increase in net transactions in deposits of $1.9b, of which $2.0b was accepted by banks.


Non money market financial investment funds

Total assets outstanding of non-money market financial investment funds decreased by $10.9b to $218.4b with net transactions of -$3.5b, of which -$3.4b was in bonds. At the end of June quarter 2012, total liabilities of non-money market financial investment funds had increased by $2.5b to $375.0b, with net transactions of $10.7b and -$8.2b of revaluation changes.


Central borrowing authorities

Total liabilities of central borrowing authorities was $310.6b at the end of June quarter 2012, an increase of $13.3b from the previous quarter. During the quarter they had net issuance of $1.8b worth of bonds and $1.1b worth of one name paper. Net asset transactions during the quarter were $14.0b, predominately driven by loans and placements $16.6b (most of which was issued by state and local general government), which was offset by decreases in holdings of one name paper worth $8.2b (most of which was issued by banks).


Securitisers

At the end of June quarter 2012, securitisers had net liability transactions of -$12.1b and liabilities outstanding of $299.6b. This was mostly composed of bonds worth $281.3b, with -$13.2b worth of transactions. Net assets of securitisers were $303.6b at the end of the quarter, with net transactions of -$0.9b. Loans and placements outstanding decreased by $1.0b to $298.7b at the end of June quarter with net transactions of -$1.0b.


Net flow of deposits to banks

Net transactions in transferable deposit liabilities of banks during the June quarter 2012 were $19.3b. The major deposit holdings came from pension funds $5.4b, other private non-financial corporations $4.0b, households $2.7b and both central borrowing authorities and rest or world $1.8b. These were slightly offset by decreased holdings of state and local public non-financial corporations $0.9b and state and local general government $0.5b. Transactions in other deposit liabilities of banks during the quarter were $32.6b, of which $11.5 was contributed by rest of the world, $7.4b by pension funds and $6.2 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 June quarter 2012, pension funds held $738.3b in shares and other equity (56.9% of their financial assets), of which $534.0b are resident and $204.3b non-resident. They held $163.7b of the net equity in life office reserves (12.6% of their financial assets) and $115.0b in bonds (8.9% of their financial assets), of which $67.5b were issued by domestic institutions and $47.5 were bonds issued by non-residents.

At the end of the June quarter 2012, life insurance corporations held $177.3b in shares and other equity (74.2% of their financial assets), of which $148.0b are held in non-money market financial investment funds. They held $32.3b in bonds (13.5% of their financial assets), of which $25.9b were issued by domestic institutions and $6.4b were 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 June quarter 2012, households had claims against the reserves of pension funds of $1,372.2b and life insurance corporations of $54.2b. The rest of world had net equity in reserves of pension funds of $1.4b and life insurance corporations of $0.9b. Pension funds had claims against the reserves of life insurance corporations of $163.7b. Life insurance corporations invested $162.4b through investment managers, and pension funds invested $538.7b 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 2012, non-life insurance corporations held $51.9b in bonds (33.5% of their financial assets), of which $47.6b was issued by residents and $4.3b was issued by non-residents. They also held $45.4b in equities (29.3% of their total financial assets), $30.8b of which was issued by residents and $14.6b issued by non-residents. They also held $15.9b in deposits (10.3% of total financial assets), and $12.6b in one name paper (8.1%).

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



Central borrowing authorities net issue of debt securities

During the quarter, central borrowing authorities had net issuances of $1.8b in bonds and net issuances of $1.1b in one name paper.

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 2012, securitisers issued $1.9b worth of one name paper and redeemed $13.2b worth of bonds.

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



GENERAL GOVERNMENT

Summary

During the June quarter 2012, consolidated general government transactions resulted in a net change in financial position of -$14.6b.

The net change in financial position for national general government was -$1.4b. The liability transactions of national general government during the quarter was zero, the main contributor being one name paper redemptions worth $3.1b offset by bonds issuance transactions worth $2.6b and increases in other accounts payable worth $1.0b.

During the quarter, transactions in financial assets were -$1.4b, with the main contributors being deposits of -$5.9b and a decrease in bond holdings worth $1.4b. This was offset by increases in other accounts receivable of $7.5b and currency worth $0.8b. At the end of the June quarter, the National General Government had financial assets outstanding of $254.8b and financial liabilities outstanding worth $485.2b.

The net change in financial position of state and local general government was -$13.2b. Transactions in state and local general government financial assets were $0.7b during the quarter. The major contributors to this transaction was a $1.9b increase in loans and placements and a $1.0b increase in other accounts receivable. These were offset by a decrease in deposits worth $2.0b. Net transactions in total liabilities where $13.9b, the main contributor being an increase in loans and placements worth $13.4b. At the end of the quarter, state and local general government had total liabilities of $252.9b, and total financial assets of $181.1b.


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 $2.6b 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 $15.5b during the June quarter 2012.

During the quarter, households had liability transactions of $34.9b, of which $19.9b was borrowed in long-term loans and a $14.6b increase in accounts payable. On the asset side, net contributions to life insurance and pension fund reserves were $44.6b. Households' transactions in deposits were $9.6b, while net transactions on prepayment of premiums and reserves were $2.3b. These were offset by a reduction in other accounts receivable of $6.0b.

At the end of the quarter, households' stock of financial assets was $3,109.4b. This was an increase of $10.7b from the previous quarter following net transactions of $50.4b and valuation decreases of $39.7b. Major asset holdings were net equity in reserves of $1,431.1b, deposits of $702.0b, equities of $535.0b, unfunded superannuation claims of $269.5b and other accounts receivable of $87.2b.


Household net borrowing and debt to liquid asset ratio

Of the net $20.2b loans borrowed by households during the June quarter 2012, borrowings from banks of $23.3b and was offset slightly by repayments to securitisers of $1.7b.

The graph below illustrates that the debt to liquid assets ratio at the end of June 2012 was at 131.1%, an increase of 2.0 percentage points on revised March 2012 data. The ratio was influenced by an increase of 2.11% in total outstanding household debt, and offset by increases in total liquid assets of 0.53%. The major contributor to the increase in liquid assets was deposits which increased 1.34% in the June quarter 2012.

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



Insurance and pension claims

During the June quarter 2012, households' net equity in reserves of pension funds decreased by $0.5b, with $40.9b in transactions and a $41.4b valuation decrease, bringing household net equity in pension funds to $1,372.2b. Net equity in reserves of life insurance corporations increased by $3.5b, with $3.7b in transactions and $0.2b valuation decrease, bringing the household net equity in life insurance to $54.2b for the June quarter. Net equity in household's unfunded superannuation claims were $269.5b, with net transactions of $0.8b. Prepayments of premiums and claims against reserves in non-life insurance corporations were $52.6b for the June quarter, with net transactions of $2.3b during the quarter.


REST OF THE WORLD

Summary

Non-residents made net transactions of $6.4b in Australian financial assets during the June quarter 2012 with valuation decreases of $3.2b, resulting in $2,120.6b worth of Australian financial instruments held as assets by non-residents, up $3.2b from the revised March quarter 2012. The main contributors were an increase of $12.6b in deposits of which $13.2b was accepted by banks, and a $3.4b increase in one name paper issuance of which $4.3b was issued by banks. These were offset by settlements of loans and placements worth $5.7b of which $3.2b was from banks, a $4.9b settlements in derivatives of which $1.7b was from banks, as well as redemptions of bonds worth $2.2b of which $5.5b was from the banks,

Australian residents had net transactions of -$1.5b in foreign financial liabilities during the June quarter 2012. The main contributors were bond maturities worth $11.3b, settlements of derivatives worth $2.0b and repayment of loans worth $2.2b. These were offset by an increase in other accounts payable of $12.3b. The total value of foreign assets held by Australian residents rose to $1,241.1b at the end of the quarter, $8.4b higher than in March 2012. This movement was driven by -$1.5b in transactions and $9.9b worth of valuation increases.


Net purchases of equities

During the June quarter 2012, non-residents acquired a net $2.4b in equities, down $12.5b from $14.9b acquired during the March quarter 2012.

NET PURCHASES OF EQUITY
Graph: NET PURCHASES OF EQUITY



Net purchases of bonds

Non-residents reduced Australian bond holdings by $2.2b during the June quarter 2012, a decrease of $23.7b from March quarter 2012 in which $21.5b of bonds were acquired.

NET PURCHASES OF BONDS
Graph: NET PURCHASES OF BONDS



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