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5232.0 - Australian National Accounts: Financial Accounts, Sep 2011 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/12/2011   
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SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Other private non-financial corporations borrowed a net $28.3b (excluding derivatives and accounts payable) during the September quarter 2011. They had net issuance of $6.8b in shares and other equities, borrowed $17.6b in loans and had net maturities of $3.6b in bonds. There was a net issuance of $7.5b of short term debt securities. These transactions resulted in total borrowings outstanding of $1,764.4b (excluding derivatives and accounts payable) and total equity on issue of $946.4b.

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 September quarter 2011, private non-financial investment funds had net issuance of $0.8b in equity and net issuance of $0.4b of bonds. This was offset by a net maturing of one name paper by $0.8b, and loans of $1.9b. Total liabilities of national public non-financial corporations increased by $1.0b to $15.5b. Liabilities of state and local public non-financial corporations increased by $3.3b to $199.2b, this was mostly due to an increase in long term loans and placements of $3.2b.


PRIVATE NON-FINANCIAL CORPORATIONS DEBT TO EQUITY RATIO

From the end of September 2009 to the end of September 2011, the value of equity on issue decreased by $47.7b and the value of debt outstanding increased by $19.3b. During the September quarter 2011, private non-financial corporation debt increased by $42.0b and equities on issue decreased by $131.3b. The original debt to equity ratio increased from 0.81 to 0.95 and the adjusted ratio increased from 1.00 to 1.02. 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
Jun Qtr 2011
Sep Qtr 2011
Sep Qtr 2011
Sep Qtr 2011
$b
$b
$b
$b

Assets of Financial corporations
Central bank
73.4
-6.8
5.1
71.7
Banks
2 361.2
52.9
39.8
2 453.8
Other depository corporations
301.9
7.3
14.2
323.5
Pension funds
1 128.7
16.4
-84.2
1 060.9
Life insurance corporations
242.8
-3.0
-11.0
228.7
Non-life insurance corporations
135.5
3.9
-1.0
138.4
Money market financial investment funds
23.4
0.4
-
23.8
Non-money market financial investment funds
294.7
-16.0
-23.0
255.7
Central borrowing authorities
261.0
16.0
1.5
278.5
Securitisers
272.6
11.3
-0.1
283.9
Other financial corporations
103.5
-3.0
-9.6
90.9
Liabilities of Financial corporations
Central bank
73.8
-3.9
3.3
73.3
Banks
2 415.3
61.3
49.6
2 526.2
Other depository corporations
348.3
3.5
18.1
369.8
Pension funds
1 205.1
18.1
-83.7
1 139.4
Life insurance corporations
252.6
-2.3
-13.5
236.9
Non-life insurance corporations
164.0
4.2
-12.6
155.7
Money market financial investment funds
24.7
0.6
-0.7
24.6
Non-money market financial investment funds
310.9
-3.8
-26.3
280.8
Central borrowing authorities
267.7
9.0
14.6
291.2
Securitisers
267.6
5.9
5.0
278.5
Other financial corporations
77.7
-1.5
-1.5
74.7

- nil or rounded to zero (including null cells)



Summary

During the September quarter 2011, financial corporations had $91.1b of liability transactions on a consolidated basis. The liability transactions were: banks; $61.3b, pension funds; $18.1b, central borrowing authorities; $9.0b, securitisers; $5.9b, non-life insurance corporations; $4.2b, other depository corporations; $3.5b, money market investment funds; $0.6b, other financial corporations -$1.5b, life insurance corporations; -$2.3b, non-money market financial investment funds; -$3.8b, and the central bank; -$3.9b.


Banks

Transactions of financial assets of banks were net $52.9b during the quarter. Major transactions in bank assets holdings were an increase in loans and placements of $24.1b, of which $6.1b was made by other private non-financial corporations, $7.4b by households and $10.6b by the rest of world. The other major contributor was net issuance of Bonds of $14.3b, of which $12.6b was held by securitisers and $5.6b was held by central borrowing authorities. During the quarter, liability transactions of banks were $61.3b, of which $56.4b were in deposits, $8.8b in short term loans and placements and $5.7b in derivatives, offset by long term lending of $5.3b.


Other depository corporations

Other depository corporations net transactions of financial assets where $7.3b in September quarter 2011. The main contributor to this increase was derivatives issuance of $6.6b, and bonds issuance of $1.7b. The net liability transactions of other depository corporations was $3.5b during the September quarter. The main contributor to this increase was derivative settlements of $6.8b and short term loans of $1.7b, this was offset by maturities of short and long term debt securities of $1.9b.


Pension funds

Net transactions of total financial assets of pension funds was $16.4b in September quarter 2011. The main contributor to this increase was equities issued with net transactions of $19.1b. Net equity in reserves of pension funds was $1,133.8b at the end of September quarter 2011, a decrease of $65.2b since June quarter 2011. This follows net transactions of total liabilities of $18.1b and valuation decreases of $83.8b. Asset holdings decreased by $67.8b to $1,060.9b, following net transactions of $16.4b and valuation decreases of $84.2b.

Households' claims against the reserves of pension funds decreased by $65.2b to $1,132.5b, following transactions of $19.3 and a valuation decrease of $84.5b.


Life insurance corporations

At the end of September quarter 2011, the financial assets outstanding of life insurance corporations were $228.7b, a decrease of $14.1b since June quarter 2011. Net asset transactions were -$3.0b and a valuation decrease of $11.1b. During the quarter, pension funds' claims against against the reserves of life offices decreased by $9.9b to $157.1b, following net transactions of -$1.8b and a valuation decrease of $8.1b.

Households' claims against the reserves of life offices decreased by $3.4b, following net transactions of -$0.6b and a valuation decrease of $2.8b.


Non-life insurance corporations

Net transactions of financial assets of non-life insurance corporations were $3.9b during the September quarter 2011. The main contributors to this increase is issuance of equities of $1.8b and bonds $0.8b. During the quarter net liability transactions of non-life insurance corporations were $4.2b, driven by the prepayments of premiums and reserves of $3.6b and other accounts payable of $0.9b.


Money market investment funds

Total assets of money market investment funds was $23.8b at the end of September quarter 2011, of which $14.1b was in holdings of one name paper and $7.3b of deposits. During the quarter total unlisted equities issued by money market investment funds remained stable at $24.6b, with net transactions of $0.6b. Net transactions of total financial assets of money market investment funds increased by $0.4b bolstered by an increase in net transactions in deposits of $1.5b.


Non money market investment funds

Total assets outstanding of non-money market investment funds decreased by $39.0b to $255.7b with net transactions of -$16.0b, of which -$4.3b was in bond holdings and -$8.7b in equities. At the end of September quarter total liabilities of non money market investment funds had decreased by $30.1b to $280.8b.


Central borrowing authorities

Total liabilities outstanding of central borrowing authorities was $291.2b at the end of September quarter 2011, a $23.5b increase on the previous quarter. During the quarter they matured $9.4b worth of bonds and issued $2.9b worth of derivatives, this was slightly offset by net lending of $2.3b and issuance of one name paper of $2.2b. Net asset transactions during the quarter were $16.0b, mostly contributed to by loans and placements of $13.0b, and bonds $4.9b.


Securitisers

At the end of the September quarter 2011, securitisers had net liability transactions of $5.9b and liabilities outstanding of $278.5b, mostly compounded of bonds worth $258.5b, with $11.3b worth of net transactions. Net assets of securitisers was $283.9b at the closing of September quarter 2011 with net transactions of $11.3b. The major assets being loans and placements outstanding of $277.9b with net transactions of $10.2b.


Net flow of deposits to banks

Net transactions in transferable deposit liabilities of banks during the September quarter 2011 were $14.9b. The major deposit contributors where households $6.9b, rest of world $6.1b, and the state and local general government $4.9b. These where slightly offset by withdrawals by central borrowing authorities of $4.0b and non-money market investment funds of $1.9b. Transactions in other deposits liabilities of banks during the quarter where $42.8b, of which $12.5b was deposits by other private non-financial corporations and $13.6b 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 September quarter 2011, pension funds held $556.2b in shares and other equity (52.4% of their financial assets), of which $367.3b was in resident companies and $188.9b was in non-resident companies. They held $157.1b of the net equity in life office reserves (14.8% of their financial assets) and $110.1b in bonds (10.4% of their financial assets), of which $63.9b were issued by domestic institutions and $46.2 were bonds issued by non-residents.

At the end of the September quarter 2011, life insurance corporations held $25.1b in bonds (11.0% of their financial assets), of which $21.2b were issued by domestic institutions and $3.9b 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 the September quarter 2011, households had claims against the reserves of pension funds of $1,132.5b and life insurance corporations of $53.8b. The 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 $157.1b. Life insurance corporations invested $151.4b through fund managers, and pension funds invested $507.1b 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 September quarter 2011, non-life insurance corporations held $45.5b in bonds (32.9% of their financial assets), of which $41.4b was issued by resident corporations, and $4.1b was issued by non-residents. They also held $45.9b in equities (33.2% of their total financial assets), $32.0b of which was issued by resident corporations and $13.9 issued by non-residents. They also held $14.3b in deposits (10.3% of total financial assets), and $12.0b in one name paper (8.7%).

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



Central borrowing authorities net issue of debt securities

During the September quarter 2011, central borrowing authorities issued $9.4b in bonds and matured $2.2b 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 September quarter 2011, securitisers matured $4.7b worth of one name paper and issued $11.3b worth of bonds.

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



GENERAL GOVERNMENT

Summary

During the September quarter 2011, consolidated general government transactions resulted in a net change in financial position of -$19.8b.

The net change in financial position for national general government was -$11.5b. The liability transactions of national general government during the quarter were $10.0b, with the main contributors being bonds issued in Australia of $19.3b, and unfunded superannuation claims of $1.3b. This was partially offset by settlements of other accounts payable $9.2b and sales of one name paper of $1.9b. During the quarter, asset transactions for national general government were -$1.5b, with the main contributors being equity issues of $1.2b and other accounts receivable of $8.5b. This was offset by settlement of derivatives worth $1.6b, reduction in deposits accepted by central bank of $6.5b, and bonds maturities of $2.3b. At the end of the quarter, national general government had total liabilities of $440.6b and total financial assets of $237.9b.

Transactions in state and local general government financial assets were $3.8b in September quarter 2011, with the main contributors being deposits accepted by banks of $6.5b and equity issuance by other private non-financial corporations of $0.5b. This was offset by loans and placements borrowed by central borrowing authorities of $3.1b. Transactions in total liabilities were $12.1b, with the main contributors being long term loans and placements of $8.3b, short term loans and placements of $2.9b and unfunded superannuation claims of $2.3b. These transactions resulted in a net change in financial position of -$8.3b. At the end of the quarter, state and local general government had total liabilities of $236.0b and total financial assets of $181.2b.


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 $19.2b 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 $23.1b during the September quarter 2011. During the quarter, households borrowed a total of $14.3b in the form of loans. On the asset side, net contributions to life insurance and pension fund reserves were $18.8. Householders' transactions in deposits were $22.8b, Net transactions on prepayment of premiums and reserves were $2.0b, while net claims on unfunded superannuation were $3.6b. These were offset by sales of equities of $2.8b.

At the end of the quarter, households' stock of financial assets was $2,519.2b. This was a decrease of $74.2b from the previous quarter, following net transactions of $43.9b and valuation decrease of $118.1b. Major asset holdings were net equity in reserves of $1,190.8b, deposits of $668.0b, equities of $222.2b, unfunded superannuation claims of $266.1b and other accounts receivable of $91.4b.


Household net borrowing and debt to liquid asset ratio

Of the net $14.3b loans borrowed by households during the September quarter 2011, bank loans accounted for $7.4b, loans from securitisers accounted for $10.4b, and $0.3b from state and local public non-financial corporations. These were offset by net loan repayments of $2.1b to other financial corporations and $0.4b to other depository corporations.

The graph below illustrates that the debt to liquid assets ratio at the end of September 2011 was at 173.0%, an increase of 3.1 percentage points on revised June 2011 data. The ratio was influenced by an increase of 0.7% in total outstanding household borrowings and a decrease in total liquid assets of 1.1%. The major contributor to the decrease in liquid assets was equities which fell by 13.1%.

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



Insurance and pension claims

During the September quarter 2011, households' net equity in reserves of pension funds decreased by $65.2b, made up of $19.3b in transactions and $84.5b in valuation decreases, bringing household net equity in pension funds to $1,132.5b. Net equity in reserves of life insurance corporations decreased by $3.4b, made up of -$0.6b transactions and $2.8b valuation decreases, bringing the household net equity in life insurance to $53.8b. Net transactions in households' unfunded superannuation claims were $3.6b and prepayments of premiums and claims against reserves in non life insurance corporations were $50.1b during the quarter.


REST OF THE WORLD

Summary

Non-residents had net transactions of $49.3b in Australian financial assets during the September quarter 2011 and a valuation increase of $25.6b, resulting in $2,116.3b of Australian financial assets being held by non-residents, up $74.9b from the revised June quarter 2011. The main contributors were net issuance of bonds, $17.5b, of which $23.0b was issued by national general government, net purchases of equities of $12.0b, of which $8.9b was issued by other private non-financial corporations and net of deposits $7.4b, of which $8.9b was accepted by Banks. These were partly offset by net redemption of one name paper by National General Government of $4.0b and a decrease in accounts receivable of $0.8b.

Australian residents had net transactions of $41.2b in foreign financial liabilities during the September quarter 2011. The main contributors were long-term loan repayments of $14.6b, short-term loan repayment of $4.9b, and unlisted shares and other equity of $7.7b. These were partly offset by bonds issued offshore by $10.6b. The total value of foreign assets held by Australian residents increased to $1,268.0b at the end of the quarter, $24.2b higher than in June 2011. Of this, $17.0b were valuation decreases.


Net purchases of equities

During the September quarter 2011, non-residents acquired a net $12.0b in equities, an decrease of $2.9b compared with the June quarter 2011 estimate.

NET PURCHASES OF EQUITY
Graph: NET PURCHASES OF EQUITY



Net purchases of bonds

Non-residents acquired $17.5b of Australian bonds during the September quarter 2011, a increase of $7.7b compared with the June quarter 2011 estimate.

NET PURCHASES OF BONDS
Graph: NET PURCHASES OF BONDS



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