Acquisition of financial assets and external financing in Germany in the third quarter of 2016 Results of the financial accounts by sector

At the end of the third quarter of 2016, households' financial assets amounted to €5,478 billion; this figure was up by a considerable €76 billion (or 1.4%) from the second quarter of 2016. The increase was accompanied by perceptible valuation gains of just over €33 billion on financial assets, in particular on shares and investment fund shares. The transaction-related acquisition of financial assets fell slightly short of the preceding quarter's figures, but was nevertheless comparatively robust at around €42 billion. The upward trend observed over the past three years thus continued. A larger proportion of the funds again flowed into currency and deposits, albeit to a weaker extent than in the previous period. At the same time, investment in shares and investment fund shares, which had increased in the preceding quarters, remained slightly below past quarter's results. Overall, both the preference for liquid and low-risk assets, which has been the trend for some time now, and a continued higher yield awareness were thus observed anew. At the same time, households’ liabilities went up by just over €16 billion, which meant that their net financial assets rose by €59 billion (1.6%) compared with the preceding quarter to €3,816 billion. By contrast, net financial assets of non-financial corporations fell by a noticeable €125 billion (7.5%), amounting to minus €1,789 billion at the end of the third quarter.

Households: robust acquisition of financial assets amidst relatively strong external financing

In the third quarter of 2016, the transaction-related acquisition of financial assets by households in Germany amounted to just over €42 billion and thus fell slightly from the previous quarter, but remained strong and did not interrupt the upward trend of the past three years. At €20 billion net, a substantial proportion flowed into currency and deposits, comprising almost exclusively transferable deposits (including currency), albeit to a somewhat lesser extent than of late. Savings deposits (including savings certificates) again experienced a marked decrease. Although households' preference for liquid deposits, which must be seen in the context of the low-interest-rate environment observed over the past few years, again diminished somewhat, it remains intact. Claims on insurance corporations and pension funds, which, like bank deposits, are typically perceived as being low-risk, were built up to a similar extent as before, adding over €19 billion.

Furthermore, households invested relatively strongly in the capital markets. In the quarter under review, the acquisition of investment fund shares was thus similarly high as in the previous quarter, with purchases principally of equity and real estate funds. By contrast, purchases of shares and other equity, at €3 billion, were slightly lower than in the preceding quarters, but remained above the long-term average. The bulk of the purchases was made up of listed shares issued by non-residents. Despite a slight decline in the inflow of funds to shares, this development amplifies the impression of a certain yield awareness as foreign assets are typically perceived as riskier and are therefore purchased to achieve higher yields. These developments also suggest that the ever present risk aversion continued to weaken slightly in the reporting quarter. In contrast to the forms of investment stated above, debt securities, which have been sold in net terms for over five years running now, continued to record outflows in the third quarter of 2016; however, at a loss of €3 billion, these were somewhat lower than in the preceding quarter. These outflows of funds are, not least, to be seen against the backdrop of low yields.

Given that the stock market environment was increasingly recovering in the reporting quarter, the considerable transaction-related increase in financial assets went hand in hand with distinct valuation gains, boosting financial assets by just over €33 billion when viewed in isolation. Besides listed shares of the rest of the world, listed shares of domestic issuers and investment fund shares were primarily affected. In the aggregate, transaction-related and valuation-related changes resulted in a distinct pick-up of financial assets by around €76 billion (1.4%), bringing them to €5,478 billion by the end of the third quarter of 2016.

At around €16 billion, households' external financing once again reached its highest value since 2000. The lenders were almost exclusively domestic corporations, especially banks. Primarily, housing loans were taken out, but financing by consumer credit, too, was again quite substantial in a longer-term comparison. Altogether, liabilities therefore increased by just over €16 billion (1%) to €1,662 billion. This, together with the marked increase in financial assets, was reflected in growth of net financial assets by €59 billion (1.6%) to €3,816 billion. In view of the fact that the growth of debt overshadowed that of nominal GDP in the reporting quarter, the debt ratio – defined as total liabilities as a percentage of nominal GDP (four-quarter moving sum) – increased slightly (by 0.2%) to 53.4% at the end of the quarter.

Non-financial corporations: acquisition of financial assets and external financing up

Although the transaction-related acquisition of financial assets by non-financial corporations was up from the previous quarter and amounted to €18 billion in the third quarter of 2016, this increase is to be seen as only moderate over the longer term. In particular, the build-up of bank deposits (including currency) and shares and other equity made a positive contribution, with inflows of €17 billion and €11 billion respectively. The majority of the shares purchased were listed shares issued by other domestic non-financial corporations. In addition, credit claims and insurance claims were increased by a smaller margin. By contrast, there were outflows in the amount of €17 billion from other accounts receivable, which include trade credits and advances. On balance, debt securities were not a meaningful factor in the context of the acquisition of financial assets by non-financial corporations.

At €22 billion, external financing in the period under review was up from the previous quarter and mainly took the form of loans, totalling €22 billion. These loans were, for the most part, provided by domestic credit institutions. Similar to the previous quarter, the third quarter, too, saw a net increase in market-based financing. Non-financial corporations received inflows of €3 billion through debt securities and just over €2 billion from shares and other equity, the funds being provided primarily by domestic corporations in both cases. By comparison, liabilities from trade credits and advances were scaled back by €8 billion.

The transaction-related increase in both financial assets and liabilities contrasted with valuation changes, which strengthened financial assets (+€58 billion) and, in particular, liabilities (+€179 billion). On balance, net financial assets thus dwindled by €125 billion in total; at the end of the third quarter of 2016, net financial assets stood at minus €1,789 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 61.8% at the end of the quarter. As the increase in nominal GDP was less pronounced than the increase in debt, the debt ratio was up slightly by 0.3 percentage point from the previous quarter.

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.