Acquisition of financial assets and financing in Germany in the second quarter of 2013 Results of the financial accounts by sector

The financial assets of households increased by €23 billion, or 0.5% on the quarter, to €5,027 billion at the end of the second quarter of 2013. The acquisition of financial assets was comparable to previous years and thus more sluggish than in the first quarter. In addition, there were holding losses of €14 billion, primarily on bonds and mutual fund shares. The trend towards more liquid investments already observed in the previous year persisted in an unchanged low-interest rate environment. Despite an increase in debt, net financial assets grew to €3,457 billion. The financial assets of non-financial corporations fell by €66 billion on the quarter to €3,304 billion. Liabilities, too, saw a decline of €52 billion, and stood at €4,804 billion at the end of the quarter. This has resulted in an overall decline in net financial assets compared with the first quarter.

Households: slight increase in financial assets and liabilities

In the second quarter of 2013, households’ acquisition of financial assets was, at €37 billion, comparable to the first quarters of the preceding years. Bank deposits (including cash holdings), at just under €18 billion, were the largest single factor in the acquisition of financial assets. Of these, sight deposits (including cash holdings) saw net inflows of just over €30 billion, whereas fixed-term and savings deposits (including savings certificates) suffered outflows of funds on a similar scale to previous quarters (€12 billion). The preference for liquidity, which was somewhat weaker in the first quarter, is thus currently at a similar level to 2012.

In the capital markets, as in the previous quarter, acquisition of financial assets was effected primarily via mutual fund shares, though acquisitions, at just under €4 billion, were down from previously (first quarter of 2013: just under €11 billion). Shares and other equity attracted only €0.2 billion, as against the figure of just over €3 billion recorded in the previous reporting period; a net volume of €0.6 billion worth of shares were divested. Bonds (including money market paper) likewise continued to be sold on balance, showing appreciable outflows of just under €6 billion. The securities-based acquisition of financial assets was thus negative, on the whole. This is likely to be associated with particular uncertainty about the future path of US monetary policy during the reporting period, which further increased capital market volatility and thus investors’ uncertainty. As a consequence of a certain risk-aversion, financial assets have been transferred from these riskier vehicles to risk-free investments. In this quarter, too, claims on insurance corporations, which were up by just under €17 billion, made up the largest portion of acquisition of financial assets, alongside sight deposits (including cash holdings).

The transaction-related rise in financial assets by just under €37 billion was accompanied, for the first time since 2012 Q2, by holding losses of €14 billion, which were due primarily to falls in the price of bonds and mutual fund shares. On the whole, at the end of 2013 Q2 financial assets were up by 0.5% on the quarter to €5,027 billion.

Households’ external financing was higher than in the first quarter of 2013. Against the background of the historically low-interest rate environment, €6 billion in loans (including other liabilities) were taken out in the second quarter, again including, in particular, loans for house purchase. Total household liabilities were up by just under 0.3% and, at the end of the quarter, stood at €1,570 billion, whereas net financial assets were up by €17 billion to €3,457 billion. The debt ratio – defined as total liabilities as a percentage of annualised gross domestic product – shrank by 0.3 percentage point to 58.3%.

Non-financial corporations: financial assets and liabilities down perceptibly

In the second quarter of 2013, the acquisition of financial assets by non-financial corporations was negative with outflows of just under €3 billion. At €10 billion, the greatest outflows were registered by bank deposits (including cash holdings); however, these outflows were not as high as in the previous quarter (€42 billion). Of these, only sight deposits (including cash holdings) were expanded, to the tune of €9 billion, whereas fixed-term and savings deposits (including savings certificates) saw outflows totalling €19 billion on balance. Trade credits and payments on account fell sharply, too, for the first time since 2009, at €12 billion. The acquisition of financial assets through securities was much lower than in the previous period, falling from €18 billion to €6 billion. The single most significant item among securities was once again shares, of which just under €6 billion were purchased (first quarter of 2013: just under €11 billion).

Non-financial corporations raised only a very small volume of financing, at just under €11 billion net, relative to the preceding quarter (€37 billion). Loans made up the lion’s share, at just over €19 billion (as against €25 billion a quarter earlier); these were provided not only by domestic banks but increasingly also by general government and non-residents. Loans from domestic private non-banks, by contrast, were paid down to the tune of just over €8 billion. A sizeable amount of other liabilities, primarily trade credits and payments on account, were redeemed (€16 billion); their importance therefore continued to diminish, as in the previous quarter. External financing on the capital market in total was weaker than in the first quarter. Financing using bonds (including money market paper) amounted to just over €3 billion, compared with €9 billion in the first quarter. Yet it remained above its long-term average – as in the preceding quarters. This indicates a growing tendency on the part of non-financial corporations to obtain debt funding in the capital markets. Equity financing, by contrast, remained stable, with inflows of just over €2 billion. Enterprises’ net financial assets therefore totalled just under -€1,500 billion, thus sinking even deeper into negative territory than in the previous period. The low level of overall external financing, combined with negative financial investment, indicates that the considerable expansion of construction investment observed during the reporting period was paid for in significant measure by running down existing financial assets. The debt ratio –¬ defined as the sum of issued bonds, loans and company pension commitments over annualised gross domestic product – rose less than in the previous quarter and stood at 67.2% (as against 66.9% in the previous quarter).

Owing to data revisions, the results published in this press release are not directly comparable with data in earlier press releases.