Results of the financial accounts by sector

At the end of the first quarter of 2013, the financial assets of households rose by €52 billion, or 1.1%, on the previous quarter to just under €4,992 billion. The acquisition of financial assets was comparable to the first quarters of the previous years, with only a small percentage of this increase, around €5 billion, attributable to capital market gains. In an environment of low interest rates, the trend towards more liquid investments continued, albeit in less pronounced form. Household debt fell slightly, resulting in a €55 billion rise in net financial assets to €3,428 billion. The financial assets of non-financial corporations registered growth of just under €52 billion to €3,398 billion, which was, however, offset by a €102 billion build-up in liabilities to €4,888 billion, thus resulting in a quarter-on-quarter decline in net financial assets.

Households: increase in financial assets, slight drop in debt

In the first quarter of 2013, households’ acquisition of financial assets was, at €47 billion, comparable to the first quarters of the preceding years. However, bank deposits (including cash holdings) recorded the lowest inflows, of just under €9 billion, since the beginning of 2011 (just over €6 billion at that time). Sight deposits (including cash holdings) contributed €21 billion in net terms to the acquisition of financial assets (€15 billion less than in the previous period). Fixed-term and savings deposits (including savings certificates) suffered – largely unchanged – outflows of funds totalling €12 billion. The preference for liquidity evident in recent quarters therefore continued, albeit in less pronounced form as compared to the previous period.

The situation on the capital markets was different, with investment fund shares recording acquisitions of just under €11 billion. These were the highest net inflows in nominal terms since the beginning of 2003 which can be explained especially by large-scale buying of mixed securities funds. Shares (including other equities), which had previously seen net outflows of just under €2 billion, attracted more than €3 billion in new funds in the first quarter of 2013. This development is likely connected to the fact that many bank deposits are still offering negative real interest rates. Only bonds (including money market paper) were still suffering outflows in the reporting quarter. However, at just under €5 billion, these were almost €3 billion lower than in the previous quarter. Claims on insurance corporations rose sharply, by €22 billion, and with sight deposits (including cash holdings) made up the lion’s share of the acquisition of financial assets.

Besides this transaction-related development in financial assets, which accounted for a net increase of €47 billion, valuation gains on the capital markets contributed just €5 billion to this development (compared to just over €15 billion in the previous quarter). Financial assets thus rose by a total of 1.1% on the quarter to €4,992 billion in the first quarter of 2013.

Households' external financing was weaker than in the previous quarter. On balance, €4 billion worth of loans (including other liabilities) were redeemed despite the historically low interest rate environment, whereas a similar volume of loans had been taken out in the previous quarter. This was particularly true of consumer loans issued by domestic banks. However, the decline, which is typical for this time of the year, was somewhat less pronounced in nominal terms than in the past. Total household liabilities fell by just under 0.2% to slightly more than €1,564 billion. As a result, net financial assets rose by almost €55 billion to €3,428 billion. The debt ratio – defined as total liabilities as a percentage of annualised gross domestic product – shrank by 0.2 percentage point to 59.0%.

Non-financial corporations: acquisition of financial assets down, external financing perceptibly higher

In the first quarter of 2013, the acquisition of financial assets by non-financial corporations amounted to €22 billion (€69 billion in the previous quarter). Bank deposits (including cash holdings) registered appreciable outflows of funds to the tune of €42 billion, compared to net inflows of €34 billion in the fourth quarter of 2012; this suggests a declining preference for liquidity. Non-financial corporations reduced both their sight deposits (including cash holdings) and their time deposits by €26 billion and €17 billion respectively. By contrast, enterprises were large-scale buyers of securities, with acquisitions of €18 billion only just short of the extensive transactions seen in the previous period (€23 billion). This can primarily be attributed to the ongoing high inflow of funds to shares, although it was, at €11 billion, some €5 billion lower than a quarter earlier. In addition, trade credits and payments on account attracted €8 billion in funds.

At just under €40 billion, external financing by non-financial corporations was significantly higher than a quarter earlier, when it had been reduced by just under €11 billion. Loans made up the lion’s share with a volume of €25 billion, of which just under €16 billion were provided by domestic banks; in the previous quarter, loans had been redeemed to the tune of €32 billion. By contrast, other liabilities, among which mainly trade credits and payments on account, became less important (+ €2 billion). On the capital markets, growth was primarily recorded for financing using bonds (including money market paper) in the first quarter of 2013. It rose from just under €5 billion in the previous quarter to more than €9 billion in nominal terms, a figure last seen ten years ago. This is probably the result of the comparatively favourable financing conditions on the capital market. Equity financing, too, attracted inflows of more than €2 billion. Overall, net financial assets thus moved further into negative territory and totalled -€1,489 billion. The debt ratio – defined as the sum of issued bonds, loans and company pension commitments over annualised gross domestic product – was 67.7% (versus 66.7% in the previous quarter).

Annexes: Tables