5232.0 - Australian National Accounts: Financial Accounts, Mar 2012 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/06/2012   
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SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Other private non-financial corporations borrowed a net $23.6b (excluding derivatives and accounts payable) during the March quarter 2012. They borrowed $10.9b in loans, had net issuance of $7.9b in shares and other equities and $3.5b in bonds. This was slightly offset by a reduction in bills of exchange of $0.5b. These transactions resulted in total borrowings outstanding of $1,849.6b (excluding derivatives and accounts payable) and total equity on issue of $1,006.1b.

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 March quarter 2012, private non-financial investment funds had net issuance of $1.6b in bonds and net issuance of $0.6b of equity. This was offset by the reduction in loans worth $2.0b. Total liabilities of national public non-financial corporations increased by $0.5b to $16.1b, the largest contributor being increased loan liabilities worth $0.4b. Liabilities of state and local public non-financial corporations increased by $4.4b to $201.9b, with net transactions of $1.5b.


PRIVATE NON-FINANCIAL CORPORATIONS DEBT TO EQUITY RATIO

From the end of March 2010 to the end of March 2012, the value of equity on issue decreased by $43.5b and the value of debt outstanding increased by $44.6b. During the March quarter 2012, private non-financial corporation debt increased by $8.1b and equities on issue increased by $66.0b. The original debt to equity ratio decreased from 0.95% to 0.90% 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
Dec Qtr 2011
Mar Qtr 2012
Mar Qtr 2012
Mar Qtr 2012
$b
$b
$b
$b

Assets of Financial corporations
Central bank
84.5
0.4
0.6
85.5
Banks
2 446.3
20.6
-0.7
2 466.2
Other depository corporations
299.4
-11.0
1.5
289.9
Pension funds
1 206.9
23.9
48.7
1 279.5
Life insurance corporations
232.4
2.0
8.1
242.5
Non-life insurance corporations
138.8
2.8
3.5
145.0
Money market financial investment funds
23.6
0.3
-
23.9
Non-money market financial investment funds
223.2
-7.6
15.7
231.4
Central borrowing authorities
279.8
1.4
6.5
287.7
Securitisers
281.4
23.2
-
304.7
Other financial corporations
78.2
-3.5
9.4
84.1
Liabilities of Financial corporations
Central bank
84.6
1.5
-0.2
85.8
Banks
2 483.8
5.0
29.4
2 518.2
Other depository corporations
334.7
-20.9
2.7
316.5
Pension funds
1 284.0
22.6
49.0
1 355.7
Life insurance corporations
234.9
1.8
7.9
244.7
Non-life insurance corporations
162.2
-0.7
4.7
166.2
Money market financial investment funds
23.6
0.9
-0.6
23.9
Non-money market financial investment funds
350.3
4.3
8.5
363.0
Central borrowing authorities
289.2
11.4
7.5
308.1
Securitisers
277.6
26.7
-3.6
300.7
Other financial corporations
73.8
0.1
1.3
75.1

- nil or rounded to zero (including null cells)



Summary

During the March quarter 2012, financial corporations had $52.7b of liability transactions on a consolidated basis. The positive liability transactions were securitisers $26.7b, pension funds $22.6b, central borrowing authorities $11.4b, banks $5.0b, non-money market financial investment funds $4.3b, life insurance corporations $1.8b, central bank $1.5b, money market investment funds $0.9b and other financial corporations $0.1b. These were offset by negative liability transactions in other depository corporations -$20.9b, and non-life insurance corporations -$0.7b.


Banks

Transactions of financial assets of banks were net $20.6b during the quarter. Major transactions in bank assets were increases in bond holdings worth $31.5b, of which $27.1b was issued by securitisers and $10.9b by central borrowing authorities. The other major contributor was an increase in one name paper holdings worth $5.2b, of which $1.8b was issued by national general government, and $1.1b by the rest of the world. During the quarter, net liability transactions of banks were $5.0b, of which $14.1b were in deposits, $8.5b were in bonds issued in Australia and $8.0b in one name paper issued in Australia. This was mainly offset by derivatives holdings worth -$21.1b, holdings of one name paper issued offshore worth -$6.1b and bonds issued offshore worth -$6.1b.


Other depository corporations

Other depository corporations net transactions of financial assets were -$11.0b in March quarter 2012. The main contributors to this decrease were derivatives issued by banks of -$5.0b, and deposits accepted by banks -$3.4b. The net liability transactions of other depository corporations were -$20.9b during March quarter 2012. The main contributor to this decrease was deposits of -$11.5b.


Pension funds

Net transactions of total financial assets of pension funds were $23.9b in March quarter 2012. The main contributor to this increase were deposits accepted, with net transactions of $10.3b, of which $10.3b was accepted by banks. Net equity in reserves of pension funds was $1,350.7b at the end of March quarter 2012, an increase of $72.0b from the previous quarter. This follows net transactions of total liabilities of $22.6b and valuation increases of $49.1b. Asset holdings increased by $72.6b to $1,279.5b, following net transactions of $23.9b and valuation increases of $48.7b.

Households' claims against the reserves of pension funds increased by $72.0b to $1,349.4.0b, following transactions of $23.1b and valuation increases of $48.9b.


Life insurance corporations

At the end of March quarter 2012, the financial assets outstanding of life insurance corporations were $242.5b, an increase of $10.1b from the previous quarter. Net asset transactions were $2.0b, leaving valuation increases worth $8.1b. During the quarter, pension funds' claims against against the reserves of life offices increased by $6.9b to $165.5b, following net transactions of $2.5b and valuation increases of $4.4b.

Households' claims against the reserves of life offices increased by $0.5b to $55.7b, following net transactions of -$1.0b and valuation increases of $1.5b.


Non-life insurance corporations

Net transactions of financial assets of non-life insurance corporations were $2.8b for March quarter 2012. During the quarter net liability transactions of non-life insurance corporations were -$0.7b, driven by other accounts payable of -$0.8.


Money market investment funds

Total assets of money market investment funds were $23.9b at the end of March quarter 2012, of which $16.2b was in holdings of one name paper ($13.9b was issued by banks), and $5.6b of deposits. During the quarter total unlisted equities issued by money market investment funds increased by $0.3b to $23.8b, with net transactions of $0.9b. Net transactions of total financial assets of money market investment funds were $0.3b for the quarter, bolstered by an increase in net transactions in deposits of $0.5b, of which $0.5b was accepted by banks.


Non money market investment funds

Total assets outstanding of non-money market investment funds increased by $8.2b to $231.4b with net transactions of -$7.6b, of which -$9.3b was in equities. At the end of March quarter 2012, total liabilities of non-money market investment funds had increased by $12.7b to $363.0b, with net transactions of $4.3b and $8.4b of revaluation changes.


Central borrowing authorities

Total liabilities of central borrowing authorities was $308.1b at the end of March quarter 2012, an increase of $18.9b from the previous quarter. During the quarter they issued $11.3b worth of bonds, which was slightly offset by maturities in one name paper issued offshore of $2.0b and derivatives redemptions of $1.5b. Net asset transactions during the quarter were $1.4b, predominately driven by one name paper worth $4.3b (most of which was issued by banks).


Securitisers

At the end of March quarter 2012, securitisers had net liability transactions of $26.7b and liabilities outstanding of $300.7b. This was mostly composed of Bonds worth $282.9b, with $26.2b worth of transactions. Net assets of securitisers were $304.7b at the end of the quarter, with net transactions of $23.2b. Loans and placements outstanding increased by $23.7b to $299.9b at the end of March quarter with net transactions of $23.7b.


Net flow of deposits to banks

Net transactions in transferable deposit liabilities of banks during the March quarter 2012 were -$13.1b. The major deposit withdrawals came from other private non-financial corporations $9.8b, banks $1.8b and the rest of the world $1.3b. These were slightly offset by contributions from pension funds of $1.6b, and state and local public non-financial corporations $0.5b. Transactions in other deposits liabilities of banks during the quarter where $25.9b, of which $11.5 was contributed by households. This was partially offset with withdrawals by other depository corporations of $3.7b.

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 March quarter 2012, pension funds held $746.7b in shares and other equity (58.4% of their financial assets), of which $534.8b was in resident companies and $211.9b was in non-resident companies. They held $165.5b of the net equity in life office reserves (12.9% of their financial assets) and $113.4b in bonds (8.9% of their financial assets), of which $65.3b were issued by domestic institutions and $48.1 were bonds issued by non-residents.

At the end of the March quarter 2012, life insurance corporations held $29.1b in bonds (12.0% of their financial assets), of which $25.3b were issued by domestic institutions and $3.8b 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 March quarter 2012, households had claims against the reserves of pension funds of $1,348.2b and life insurance corporations of $55.7b. The rest of world had net equity in reserves of pension funds of $1.2b and life insurance corporations of $0.9b. Pension funds had claims against the reserves of life insurance corporations of $165.5b. Life insurance corporations invested $163.0b through fund managers, and pension funds invested $542.6b 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 March quarter 2012, non-life insurance corporations held $48.0b in bonds (33.1% of their financial assets), of which $43.7b was issued by resident corporations, and $4.3b was issued by non-residents. They held $47.6b in equities (32.8% of their total financial assets), $32.3b of which was issued by resident corporations and $15.3b issued by non-residents. They held $14.8b in deposits (10.2% of total financial assets), and $12.7b in one name paper (8.8%).

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 issued $11.3b in bonds and matured $1.4b of 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 March quarter 2012, securitisers issued $0.1b worth of one name paper and $26.2b worth of bonds.

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



GENERAL GOVERNMENT

Summary

During the March 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 -$14.8b. The liability transactions of national general government during the quarter were $12.4b, the main contributor being other accounts payable transactions worth $7.8b and one name paper issued in Australia worth $3.1b.

During the quarter, transactions in financial assets were -$2.4b, with the main contributors being other accounts receivable of -$5.0b and derivatives settlements worth $2.4b. This was offset by an increase of $2.8b in deposits and one name paper issuances worth $2.2b. At the end of the March quarter the National General Government had financial assets outstanding of $242.8b and financial liabilities outstanding worth $466.0b.

The net change in financial position of state and local general government was $0.2b. Transactions in State and Local General Government financial assets were zero during the quarter. A $0.8b increase in loans and placements was offset by a decrease in accounts receivable worth $0.9b. Net transactions in total liabilities where -$0.2b, the main contributors being a reduction of short-term loans payable worth $1.2b and a decrease in accounts payable liabilities of $0.2b. This was offset by an increase in long term loans and placements of $1.2b. These transactions resulted in a net change in financial position of $0.2b. At the end of the quarter, state and local general government had total liabilities of $238.9b and total financial assets of $182.0b.


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 $1.1b 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 $10.0b during the March quarter 2012.

During the quarter, households had liability transactions of $17.9b, of which $13.7b was borrowed in the form of long-term loans and a $4.7b increase in accounts payable. On the asset side, net contributions to life insurance and pension fund reserves were $22.3b. Householders' transactions in deposits were $10.1b, net transactions on prepayment of premiums and reserves were -$0.2b, while net claims on unfunded superannuation were $1.4b. These were offset by a reduction in accounts receivable of $5.5b.

At the end of the quarter, households' stock of financial assets was $2,773.5b. This was an increase of $97.8b from the previous quarter following net transactions of $27.9b and valuation increases of $69.9b. Major asset holdings were net equity in reserves of $1,409.2b, deposits of $692.7b, equities of $232.2b, unfunded superannuation claims of $268.6b and other accounts receivable of $88.5b.


Household net borrowing and debt to liquid asset ratio

Of the net $13.0b loans borrowed by households during the March quarter 2012, borrowings from securitisers accounted for $24.0b of all loans and was mainly offset by bank loans were –$10.6b.

The graph below illustrates that the debt to liquid assets ratio at the end of March 2012 was at 170.1%, a decrease of 3.1 percentage points on revised December 2011 data. The ratio was influenced by an increase of 0.9% in total outstanding household borrowings, offset by greater increases in total liquid assets of 2.75%. The major contributor to the increase in liquid assets was deposits which increased 1.48% in the March quarter 2012.

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



Insurance and pension claims

During the March quarter 2012, households' net equity in reserves of pension funds increased by $72.0b, made up of $23.1b in transactions and $48.9b in valuation increases, bringing household net equity in pension funds to $1,349.4b. Net equity in reserves of life insurance corporations increased by $0.5b, made up of -$1.0b in transactions and $1.5b in valuation increases, bringing the household net equity in life insurance to $55.7b. Net transactions in household's unfunded superannuation claims were $268.6b with net transactions of $1.3b. Prepayments of premiums and claims against reserves in non-life insurance corporations were $50.3b for the quarter, with net transactions of -$0.2b during the quarter.


REST OF THE WORLD

Summary

Non-residents had net transactions of $27.9b in Australian financial assets during the March quarter 2012 with a valuation increase of $21.2b, resulting in $2,114.6b worth of Australian financial instruments held as assets by non-residents, up $49.1b from the revised December quarter 2011. The main contributors were net purchases of bonds worth $19.7b of which $18.3b was issued by the national general government, increased holdings of equity worth $16.0b of which $12.4b is issued by other private non-financial corporations, issuance of loans worth $9.4b of which $7.6b was borrowed by other private non-financial corporations. These were offset by settlements of derivatives worth $14.1b of which $13.6b is from banks, as well as redemptions of one name paper worth $8.2b of which -$5.0b was from banks and -$4.0b from central borrowing authorities.

Australian residents had net transactions of $12.1b in foreign financial assets during the March quarter 2012. The main contributors were purchase of bonds worth $6.3b, increases in accounts receivable worth $4.5b, shares and other equity held of $8.1b, and loans of $3.8b. These were offset by a reduction in derivative settlements of $8.3b. The total value of foreign assets held by Australian residents rose to $1,234.4b at the end of the quarter, $25.4b higher than in December 2011. This was driven by $12.1b in transactions and $13.3b worth of valuation increases.


Net purchases of equities

During the March quarter 2012, non-residents acquired a net $16.0b in equities, down $3.9b from $19.9b acquired during the December quarter 2011.

NET PURCHASES OF EQUITY
Graph: NET PURCHASES OF EQUITY



Net purchases of bonds

Non-residents acquired $19.7b of Australian bonds during the March quarter 2012, down $0.3b from $20.0b acquired during the December quarter 2011.

NET PURCHASES OF BONDS
Graph: NET PURCHASES OF BONDS