5232.0 - Australian National Accounts: Financial Accounts, Sep 2013 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 19/12/2013   
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SECTORAL ANALYSIS


NON-FINANCIAL CORPORATIONS

Summary

Other private non-financial corporations borrowed a net $27.0b (excluding derivatives and accounts payable) during the September quarter 2013. They borrowed $11.2b in loans, they had net issuance of $10.0b in shares and other equities and net issuances of $4.7b in bonds. This was partially offset by maturities in bills of exchange of $2.9b. These transactions resulted in total borrowings outstanding of $2,283.6b (excluding derivatives and accounts payable) and total equity on issue of $1,341.0b.

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 2013, private non-financial investment funds issued $0.5b in bonds. This was partially offset by repayments of $0.3b in loans. Total liabilities of national public non-financial corporations increased by $2.6b to $25.6b. Total liabilities of state and local public non-financial corporations were $193.7b, with net transactions of $0.1b.


PRIVATE NON-FINANCIAL CORPORATIONS DEBT TO EQUITY RATIO

From the end of September 2011 to the end of September 2013, the value of equity on issue increased by $154.7b and the value of debt outstanding increased by $120.8b. During the September quarter 2013, private non-financial corporation equity on issue increased by $90.5b and debt increased by $13.6b. The original debt to equity ratio increased from 0.79% to 0.75% and the adjusted ratio remains flat at 0.9. 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 2013
Sep Qtr 2013
Sep Qtr 2013
Sep Qtr 2013
$b
$b
$b
$b

Assets of Financial corporations
Central bank
94.7
-4.5
0.9
91.1
Banks
2 692.6
-4.8
7.2
2 694.9
Other depository corporations
316.2
-17.1
-2.2
296.8
Pension funds
1 511.6
28.2
53.0
1 592.9
Life insurance corporations
253.2
0.9
7.4
261.6
Non-life insurance corporations
174.3
4.9
0.4
179.6
Money market financial investment funds
26.5
-2.7
-
23.9
Non-money market financial investment funds
244.0
0.8
13.0
257.8
Central borrowing authorities
326.5
-4.0
2.5
325.0
Securitisers
334.8
1.3
-
336.1
Other financial corporations
98.5
-4.5
9.6
103.6
Liabilities of Financial corporations
Central bank
94.0
-3.8
0.6
90.8
Banks
2 841.8
-0.5
53.4
2 894.7
Other depository corporations
315.9
-25.5
0.8
291.1
Pension funds
1 611.0
29.6
53.3
1 693.9
Life insurance corporations
256.8
1.5
8.5
266.8
Non-life insurance corporations
187.7
2.4
4.2
194.3
Money market financial investment funds
26.5
-1.0
-1.7
23.9
Non-money market financial investment funds
410.1
-1.2
15.5
424.4
Central borrowing authorities
333.9
-2.3
-0.2
331.4
Securitisers
333.3
4.1
-1.8
335.6
Other financial corporations
90.8
-4.2
9.0
95.5

- nil or rounded to zero (including null cells)



Summary

During the September quarter 2013, financial corporations had a net of -$0.9b of liability transactions. The negative liability transactions were other depository corporations $25.5b, other financial corporations $4.2b, central bank $3.8b, central borrowing authorities $2.3b, non-money market financial investment funds $1.2b, money market financial investments funds $1.0, and banks $0.5b. These were offset by positive liability transactions in pension funds $29.6b, securitisers $4.1b, non-life insurance corporations $2.4b and life insurance corporations $1.5b.


Banks

Transactions of financial assets of banks were net -$4.8b during the quarter. Major transactions in bank assets were net settlements of derivatives of $42.7b, of which $28.3b were settled with rest of world and $9.6b were settled with other depository corporations. This decrease was mostly off-set by increases in loans and placements of $22.9b, of which $12.9b were borrowed by households and $5.9b were borrowed by rest of world, and increases in bond holdings of $13.4b, of which $7.5b were issued by securitisers and $4.3b were issued by central borrowing authorities. Transactions of financial liabilities of banks were net -$0.5b. While deposits with banks increased $56.1b, these were more than offset by net decreases in the liability of derivatives (-$41.5b), one name paper issued offshore (-$12.4b) and one name paper issued in Australia (-$5.7b).


Other depository corporations

Other depository corporations net transactions of financial assets were -$17.1b in September quarter 2013. The main contributor to this decrease being a decrease of $19.2b of derivatives and a decrease in loans and placements borrowed of $5.6b. This was partially offset by an increase in bonds issued of $6.0b.

The net liability transactions of other depository corporations were -$25.5b during September quarter 2013. The main contributors to this transaction were decrease in derivatives of $19.2b and decreases in deposits of $7.3b.


Pension funds

Asset holdings increased by $81.3b to $1,592.9b, following net transactions of $28.2b and valuation increases of $53.1b in September quarter 2013. The main contributors to this increase were an increase of equity holdings of $62.2b ($11.2b transactions and $51.0b revaluations) and an increase of deposits holdings of $7.1b.

Net equity in reserves of pension funds was $1,684.5b at the end of September quarter 2013, an increase of $84.5b from the previous quarter. This follows net transactions of $28.5b and valuation increases of $56.0b.

Households' claims against the reserves of pension funds increased by $84.5b to $1,682.9b, following transactions of $28.5b and valuation increases of $56.0b.


Life insurance corporations

At the end of September quarter 2013, the financial assets outstanding of life insurance corporations were $261.6b, an increase of $8.4b from the previous quarter. Net asset transactions were $0.9b, and valuation increases were $7.5b. During the quarter, pension fund claims against the reserves of life offices increased by $4.9b to $183.7b, following net transactions of -$0.6b and valuation increases of $5.5b.

Households' claims against the reserves of life offices increased by $3.4b to $57.1b, following net transactions of $1.7b and valuation increases of $1.7b.


Non-life insurance corporations

Net transactions of financial assets of non-life insurance corporations were $4.9b and revaluations were $0.4b with financial assets outstanding of $179.6b. During the quarter net liability transactions of non-life insurance corporations were $2.4b with revaluations of $4.2b.


Money market financial investment funds

Total assets of money market investment funds were $23.9b at the end of September quarter, of which $11.0b was in holdings of one name paper (of which $9.7b was issued by banks) and $10.0b was in deposits. Net transactions of total financial assets of money market investment funds were -$2.7b for the quarter, driven by net transactions in one name paper of -$1.8b, mainly issued by banks.

During the quarter total unlisted equities issued by money market investment funds decreased by $2.7b to $23.8b.


Non-money market financial investment funds

Total assets outstanding of non-money market investment funds increased by $13.8b to $257.8b with net transactions of $0.8b and revaluation changes of $13.0b. At the end of September quarter 2013, total liabilities of non-money market investment funds had increased by $14.3b to $424.4b, with net transactions of -$1.2b and $15.5b of revaluation changes.


Central borrowing authorities

Total liabilities of central borrowing authorities were $331.4b at the end of September quarter 2013, a decrease of $2.5b from the previous quarter. Net asset transactions during the quarter were -$4.0b, driven by a decrease of one name papers held of $4.8b and settlements of derivatives of $5.0b. This was partially offset by an increase in loans and placements of $5.9b.


Securitisers

At the end of September quarter 2013, securitisers had net liability transactions of $4.1b and liabilities outstanding of $335.6b. This was mostly composed of bonds worth $316.8, with $6.0b worth of net transactions. Net assets of securitisers were $336.1b at the end of the quarter, with net transactions of $1.3b. Loans and placements increased by $1.7b to $331.1 at the end of September, driven by a borrowing of households (which increased $1.1b) and other private non-financial corporations (which increased by $0.7b).


Net flow of deposits to banks

Net transactions in transferable deposit liabilities of banks during the September quarter 2013 were $25.3b. The major deposit holdings came from households $9.7b, rest of world $5.7b, state and local general government $4.1b and other private non-financial corporations $2.9b. Transactions in other deposit liabilities of banks during the quarter were $31.1b of which $13.0b was with households, $8.0b with rest of world, $6.0b with pension funds and $3.8b with state and local general government. This was partially offset by other private non-financial corporations -$2.5b.

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 September quarter 2013, pension funds held $941.2b in shares and other equity (59.1% of their financial assets), of which $676.3b are resident and $264.9b non-resident. They held $183.7b of the net equity in life office reserves (11.5% of their financial assets) and $134.7b in bonds (8.5% of their financial assets), of which $75.3b were issued by domestic institutions and $59.4 were bonds issued by non-residents.

At the end of the September quarter 2013, life insurance corporations held $203.3b in shares and other equity (77.7% of their financial assets), of which $168.3b are held in non-money market investment funds. They held $31.7b in bonds (12.1% of their financial assets), of which $26.1b were issued by domestic institutions and $5.6b 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 September quarter 2013, households had claims against the reserves of pension funds of $1,682.9b and life insurance corporations of $57.1b. The rest of world had net equity in reserves of pension funds of $1.6b and life insurance corporations of $0.9b. Pension funds had claims against the reserves of life insurance corporations of $183.7b. Life insurance corporations invested $164.1b through investment managers, and pension funds invested $679.0b 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 2013, non-life insurance corporations held $58.8b in bonds (32.7% of their financial assets), of which $52.3b was issued by residents and $6.5b was issued by non-residents. They also held $53.6b in equities (29.8% of their total financial assets), $36.4b of which was issued by residents and $17.2b issued by non-residents. They also held $17.1b in deposits (9.5% of total financial assets), and $9.4b in one name paper (5.2%).

ASSETS OF NON-LIFE INSURANCE CORPORATIONS
Graph: ASSETS OF NON-LIFE INSURANCE CORPORATIONS



Central borrowing authorities net issue of debt securities

During the September quarter, central borrowing authorities had net issuance of $0.9b in bonds and net issuance of $3.5b 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 September quarter 2013, securitisers had net issuance of $6.0b worth of bonds and net maturities of $0.5b worth of one name paper.

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



GENERAL GOVERNMENT

Summary

During the September quarter 2013, consolidated general government transactions resulted in a net change in financial position of -$16.2b.

The net change in financial position for national general government was -$14.4b. The liability transactions of national general government during the quarter were $10.9b. The main contributor being issuance of bonds of $20.8b. This increase was partially offset by a decrease of other accounts payable of $6.5b and a decrease of derivatives of $6.1b. During the quarter, transactions in financial assets were -$3.5b. The main contributors were a decrease in derivatives worth $3.3b, maturities of bonds worth $2.9b and a decrease in deposits worth $2.1b. These were partially offset by an increase of other accounts receivable of $5.4b. At the end of the September quarter, the national general government had total financial assets outstanding of $287.7 and total financial liabilities outstanding worth $554.7.

The net change in financial position of state and local general government was -$1.8b. Transactions in state and local general government financial assets were $5.0b during the quarter. The main contributor to this increase was transactions of $7.9b in deposits accepted by banks. Net transactions of total liabilities were $6.8b. The main contributors being an increase in long term loans and placements of $4.9b and unfunded superannuation claims worth $1.5b. At the end of the quarter, state and local general government had total financial assets outstanding of $189.2b and total financial liabilities outstanding of $308.5b.


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 main contributor to the increase being issuance of treasury bonds of $20.8b.

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 $27.1b during September quarter 2013.

During the quarter, households had liability transactions of $18.7b, of which $13.5b was borrowed in long-term loans and $7.4b increases in other accounts payable. This was partially offset by repayments of short term loans and placements worth $1.7b. On the asset side, total asset transactions were $45.9b for the quarter. This was driven by net contributions to life insurance and pension fund reserves of $30.2b as well as transactions in deposits of $22.9b and unfunded superannuation claims of $3.2b. These were offset by a decrease in equities of $3.3b and a decrease of other accounts receivable of $8.9b.

At the end of the quarter, households' stock of financial assets was $3,664.4b. This was an increase of $139.6b from the previous quarter following net asset transactions of $45.9b and valuation increases of $93.7b. Major asset holdings were net equity in reserves of $1,749.8b, deposits of $780.9b, equities of $632.5b and unfunded superannuation claims of $354.2b.


Household net borrowing and debt to liquid asset ratio

Of the net $13.5b loans borrowed by households during the September quarter 2013, $14.5b were borrowed from banks and $1.0b from securitisers.

The graph below illustrates that the debt to liquid assets ratio at the end of September 2013 was at 124.9%, a decrease of 2.3 percentage points on revised June 2013 data. The ratio was influenced by an increase of 1.2% in total outstanding household debt, and an increase in total liquid assets of 3.5%. The major contributor to the increase in liquid assets was equities which increased 4.2%, partially offset by an decrease in bonds of 3.5% in the September quarter 2013.

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



Insurance and pension claims

During the September quarter 2013, households' net equity in reserves of pension funds increased by $84.5b, with $28.5b in transactions and a $56b valuation increase, bringing household net equity in pension funds to $1,682.9b. Net equity in reserves of life insurance corporations increased by $3.4b, with $1.7b in transactions and a $1.7b valuation increase, bringing the household net equity in life insurance to $57.1b for the September quarter. Net equity in household's unfunded superannuation claims were $354.2b, with net transactions of $3.2b. Prepayments of premiums and claims against reserves in non-life insurance corporations were $54.6b for the September quarter, with net transactions of $1.1b during the quarter.


REST OF THE WORLD

Summary

Non-residents made net transactions of $7.8b in Australian financial assets during the September quarter 2013 with a valuation increase of $42.1b, resulting in $2395.2b worth of Australian financial assets held by non-residents, up $49.9b from the revised June quarter 2013. The main contributors were an increase of $21.7b in bonds of which $14.7b was issued by national general government, a $10.2b increase in equites of which $7.9b were issued by other private non-financial corporations, a $6.9b increase in loans and placements of which $7.5b were borrowed by other private non-financial corporations. These increases were partially offset by $33.7b decrease in derivatives of which $27.5b was accepted by banks, and a decrease of $5.8b in one name paper of which $12.4b was from banks.

Australian residents had net transactions of -$7.5b in foreign financial liabilities during the September quarter 2013. The main contributors were a decrease of derivative liabilities worth $27.1b, These were offset by increases in loans and placements of $2.5b, increases in the purchase of equity of $12.7b, and increase in long term securities of $3.5b. The total value of foreign assets held by Australian residents rose to $1540.4b at the end of the quarter, $7.1b higher than in June 2013. This movement was driven by $15.3b in transactions and $8.2b worth of valuation decrease.


Net purchases of equities

During the September quarter 2013, non-residents acquired a net $10.2b in equities, up $1.6b from $8.6b acquired during the June quarter 2013.

NET PURCHASES OF EQUITY
Graph: NET PURCHASES OF EQUITY



Net purchases of bonds

Net transaction in Australian bonds by non-residents was $21.7b during the September quarter 2013, an increase of $21.7b from June quarter 2013 in which $0.0b of bonds were acquired.

NET PURCHASES OF BONDS
Graph: NET PURCHASES OF BONDS