• Households reallocate time deposits to overnight deposits
• Real return for less wealthy households remains negative
• External financing of non-financial corporations falls to €37 billion 

Steep rise in households’ financial assets

In the second quarter of 2025, households’ financial assets increased significantly, closing the quarter at €9,216 billion. This represents a rise of €138 billion on the previous quarter. Households built up claims worth €69 billion and also recorded valuation gains of €69 billion. Following significant valuation losses at the beginning of the year, the market values of many investments were up distinctly again.

On balance, households reduced their time deposits by €14 billion in the second quarter of 2025, particularly in the short-term segment. They increasingly shifted freed-up funds into overnight deposits: cash and sight deposits grew by €51 billion. This was due to the prevailing interest rate conditions. Interest rates on short-term time deposits fell more sharply again than those on the overnight deposits following the cuts in key interest rates. Furthermore, the announcement of extensive tariffs by the US government in early April and the resulting uncertainty are likely to have led households to build up liquidity buffers.

The increase in claims on shares and other equity amounted to €7 billion, €4 billion of which was attributable to foreign listed shares. On balance, only a small number of purchases were recorded in the case of listed shares from domestic issuers. 

Although the sharp build-up of investment fund shares observed in the previous quarters lost some momentum in the reporting quarter, it remained strong at €24 billion. The portion attributable to the purchase of money market fund shares fell to €4 billion, normalising further by longer-term standards.

By contrast, there was little movement in debt securities. They were again purchased in the amount of €1 billion on balance. Insurance and pension claims were also acquired on much the same scale as in the previous period (down from €16 billion in the first quarter to €13 billion).

In the second quarter of 2025, valuation gains were a major factor in the increase in financial assets: a total of €69 billion in positive valuations was recorded, following valuation losses of €74 billion in the previous quarter. Shares and other equity made the largest contribution, with valuation gains of €42 billion. Investment funds likewise posted valuation gains again (€19 billion), following significant losses in the first quarter. Insurance and pension claims accounted for smaller valuation gains of €3 billion.[1]

Real return on financial assets slightly higher

The real total return, i.e. the return adjusted for inflation, on financial assets represents the actual return on financial assets for households. With the Distributional Wealth Accounts (DWA), the Bundesbank provides additional data on the distribution of household wealth.[2] Considering the individual structure of financial assets, Chart 2 shows the real total return on financial assets along the net wealth distribution. 

An analysis by wealth groups shows that the average possible real return across all groups rose slightly in the second quarter.[3] However, households in the bottom 50 % of the wealth distribution continued to record a negative return. These households hold their financial assets almost exclusively in low-risk forms of investment such as deposits and insurance claims, where returns were weak. Positive contributions from capital market investments made a major contribution to higher yields, especially for the wealthiest 10 % of households. This has a decisive impact on the real total return on financial assets. Looking at all households, the aggregate real total return increased to around 1.4 % in the second quarter of 2025, with shares and investment fund shares, in particular, making notable positive contributions. A negative real return on deposits continued to have a dampening effect.

Slight uptick in borrowing, debt ratio remains stable

Households’ liabilities grew to a total of €2,151 billion in the second quarter of 2025. This was driven by an increase in borrowing of €11 billion, a figure that has not been seen since the fourth quarter of 2022. 

Owing to the increase in nominal gross domestic product, the debt ratio remained stable at 49.1 %.[4]

Net financial assets rose by €128 billion to €7,064 billion overall.

External financing of non-financial corporations down

Non-financial corporations’ external financing fell by €19 billion to €37 billion in the second quarter, following significant inflows in the preceding quarter.

Loan-based external financing fell significantly, from €36 billion in the previous quarter to €16 billion. This was due to a decline in borrowing from domestic monetary financial institutions and other domestic enterprises. In contrast, borrowing from abroad in the amount of €14 billion made a considerable contribution to stabilising this component of external financing. Overall, borrowing remained in line with developments since 2023.

Net issuance of debt securities dropped from €3 billion in the previous quarter to almost zero. Issuance of shares and other equity remained stable at €8 billion, following €10 billion in the preceding quarter.

Looking at the year as a whole, based on four-quarter moving sums, external financing stagnated compared with the previous quarter and continued to show little momentum.

At the end of the second quarter of 2025, non-financial corporations’ liabilities grew by €218 billion to €12,051 billion. In addition to external financing, this was also due to valuation effects of €181 billion, which were mainly attributable to the issued equity (€151 billion). The decline in the dynamics of debt instruments compared with the previous quarter, coupled with higher nominal economic output, resulted in the debt ratio moving sideways by 68.2 %.[5] 

The financial assets of non-financial corporations rose by €43 billion, standing at €8,931 billion as at the end of the quarter under review. Non-financial corporations’ net financial assets dropped to − €3,120 billion overall.

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

Footnotes:

1. The method for calculating households’ technical provisions is based on the Solvency II reporting regime, under which the discounted cash flow method is used to calculate/value these provisions: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02009L0138‑20190113. The relevant interest rate term structure for discounting technical provisions in Solvency II is determined by EIOPA on a monthly basis. At each valuation date, the provisions for all existing contracts must be valued at applicable interest rates. This form of marking to market means that, under Solvency II, technical provisions are significantly influenced by the current interest rate environment. This means valuation effects may be stronger in certain quarters.
2. The DWA financial portfolio comprises the following asset types: deposits, debt securities, listed shares, investment fund shares and insurance claims (life insurance and private pension funds). For more information on the DWA, see also https://www.bundesbank.de/en/statistics/macroeconomic-accounting-systems/balance-sheets/balance-sheets-792952#tar-2
3. Specifically, the net wealth distribution is divided into four wealth groupings: the top 1 % of the distribution, the next 9 % of the distribution (90 % to 99 %), the following 40 % of the distribution (50 % to 90 %), and the less wealthy half of the distribution (0 % to 50 %). Net wealth is calculated as the difference between total assets (financial portfolio plus real estate and business assets) and liabilities (loans for house purchase and other debt).
4. The debt ratio represents debt as a percentage of nominal gross domestic product (four-quarter moving sum).