At the end of the fourth quarter of 2016, households' financial assets amounted to €5,586 billion; this figure was up markedly by €98 billion (or 1.8%) from the third quarter of 2016. The increase owed partly to substantial valuation gains of just over €53 billion on financial assets, in particular on equities and investment fund shares. The transaction-based acquisition of financial assets was similarly robust as in the two preceding quarters, amounting to roughly €45 billion. However, this meant that the upward trend observed over the past three years weakened somewhat. The preference for liquid and low-risk assets, which has been the prevailing tendency for some time now, was still evident overall. By far the greatest share of funds once again flowed into currency and deposits, which saw inflows reach their second-highest value since 1999. By contrast, investment in shares and investment fund shares, which had still been strong in the preceding quarters, was distinctly weaker. In the same period, households’ liabilities grew by just under €9 billion, which meant that their net financial assets rose by €90 billion (2.3%) from the preceding quarter to €3,915 billion. At the same time, the net financial assets of non-financial corporations increased by €62 billion (3.4%) to -€1,750 billion at the end of the fourth quarter. 

Households: upward trend in acquisition of financial assets slightly weakened while external financing more robust 

Households’ transaction-related financial investment in Germany remained high in the fourth quarter of 2016, at €45 billion. However, the persistent upward trend since the end of 2013 weakened slightly. At €45 billion net, the second-highest figure since 1999, the bulk of the funds flowed into currency and transferable deposits. Time deposits and savings deposits as well as savings certificates remained broadly unchanged. Given the prevailing low-interest-rate environment over the past few years, households thus showed a sustained preference for particularly liquid deposits. Claims on insurance corporations and pension funds, which, like bank deposits, are typically perceived as being low-risk, were built up on a significant scale of just under €20 billion. This increase more or less matched the previous year’s figure. 

Investment by households in the capital markets was rather restrained compared with the preceding quarters, however. Shares and other equity to the tune of nearly €1 billion were sold on balance, especially listed shares issued by domestic corporations. At the same time, listed shares issued abroad recorded slight inflows of funds, suggesting a certain yield awareness, as foreign assets are typically perceived to be riskier and are therefore acquired in the expectation of higher yields. Debt securities recorded outflows in the fourth quarter of 2016 as well, which were similar to before at €3 billion. These outflows of funds can likely be viewed in the context of weak yields. In contrast to this, the acquisition of investment fund shares, primarily in equity funds and mixed securities funds, was only a little weaker than before, with inflows of just over €5 billion. Given the low overall level of investment in the capital markets in the fourth quarter, risk aversion persisted in the reporting period. On the whole, however, it appears to have lessened again in 2016, as capital market investment was strong, if anything, over the entire year. 

The favourable capital market setting in the quarter under review brought distinct valuation gains to households in Germany, in addition to the transaction-related increase in financial assets; taken in isolation, these gains boosted financial assets by €53 billion. Besides listed shares from abroad, this mainly concerned listed shares issued in Germany and investment fund shares. Over the course of the year, as well, valuation changes in equities and investment fund shares made a positive contribution overall to the increase in financial assets. Together, the transaction and valuation-based changes led to a considerable fourth-quarter increase in financial assets of around €98 billion, or 1.8%, taking the figure to €5,586 billion at the end of the quarter. The rise from the fourth quarter of 2015 amounted to 4.6%. 

In terms of external financing, households raised funds in the amount of around €9 billion, which was lower than in the strong previous quarter, although external financing grew slightly when viewed over the full year. On the whole, the persistent upward trend since mid-2013 thus continued. The funds were predominantly issued by domestic banks in the fourth quarter of 2016, mainly in the form of loans for house purchases. Liabilities therefore rose by just under €9 billion, or 0.5%, to €1,671 billion. In combination with the growth in financial assets, this resulted in net financial assets increasing by €90 billion (or 2.3%) to €3,915 billion. In view of the fact that growth in nominal GDP outpaced the increase in debt in the reporting quarter, the debt ratio – defined as total liabilities as a percentage of nominal GDP (four-quarter moving sum) – decreased slightly (by 0.1 percentage point) to 53.3% at the end of the quarter. This represented a decline of 0.2 percentage point on the prior-year figure. 

Non-financial corporations: robust acquisition of financial assets, weak external financing 

The transaction-related acquisition of financial assets by non-financial corporations was relatively robust in the fourth quarter of 2016, at just over €51 billion. They acquired mainly shares and other equity (€33 billion), including listed shares issued in Germany and abroad, in particular. Currency and deposits were also built up, comprising largely transferable deposits (including currency) at just under €16 billion. Credit claims of non-financial corporations, especially on non-residents, also rose, with inflows of €14 billion. By contrast, clear outflows of €9 billion net were recorded in respect of other accounts receivable, which include trade credits and advances. There were also smaller outflows relating to debt securities, but these did not play a material role in the acquisition of financial assets overall. 

The external financing of non-financial corporations stood at €15 billion in the quarter under review and was thus distinctly weaker than in the third quarter, but at the same time exceeded the prior-year figure by a wide margin. The most important source of financing was other accounts payable, primarily trade credits and advances, which were taken up in the amount of €25 billion. Funding via debt securities acquired both by German residents and non-residents was also stronger than in the preceding quarter, at €6 billion in total. Inflows of funds from issuing shares and other equity came to €1 billion on balance. Of this, liabilities in the form of listed shares to other corporations in Germany were expanded by just under €19 billion, whereas those to households and non-residents were simultaneously scaled back by €18 billion. Liabilities in the form of loans were redeemed to the tune of €3 billion in total. 

Alongside the transaction-related increase in financial assets and liabilities, there were marked valuation changes which boosted not only financial assets by €121 billion, but also liabilities by €96 billion. Net financial assets thus rose by a total of €62 billion in the fourth quarter, reaching -€1,750 billion. The debt ratio – defined as the sum of issued debt securities, loans and pension provisions as a percentage of nominal GDP (four-quarter moving sum) – amounted to 61.5% at the end of the fourth quarter. Since nominal GDP grew more strongly than debt, the debt ratio was down from the previous quarter by 0.3 percentage point. Compared with the prior-year figure, however, it was up by 0.5 percentage point. 

Owing to interim data revisions of the financial accounts and national accounts, the figures stated in this press release are not directly comparable with those shown in earlier press releases.