Investment and financing by sector in the first quarter of 2011

(Results of the financial accounts)

Households’ acquisition of financial assets amounted to almost €50 billion in the first quarter of 2011, and thus increased significantly on the quarter. Debt was reduced slightly. Around €4 billion worth of loans were redeemed during the reporting quarter. Household financial assets amounted to €4,824 billion at the end of the first quarter. Acquisition of financial assets by non-financial corporations also rose relatively strongly by around €41 billion quarter-on-quarter. At the same time, external financing increased by close to €15 billion.

Households: financial assets up further, debt down slightly

Households’ acquisition of financial assets amounted to just under €50 billion in the first quarter of 2011. It significantly exceeded the previous quarter’s figure of €33 billion. This was due particularly to the sharp rise in economic output, which led to a perceptible increase in disposable income.

Growth was mainly spread across bank deposits, securities and claims on insurance corporations. Bank deposits (including currency) rose by just under €8 billion net, thus showing relatively weak growth compared with the preceding quarter. There were significant differences between the various forms of bank deposit, however. The increase in interest paid on less-liquid deposits could have led to portfolio shifts from overnight deposits to higher-interest forms of deposit in the first quarter of 2011. Sight deposits fell while savings deposits recorded net growth of over €7 billion. Savings certificates likewise showed positive growth, rising by just under €2 billion. Fixed-term deposits were reduced on balance by around €1 billion. This result is attributable mainly to a sharply declining trend in short-term time deposits. Long-term time deposits continued to grow in the reporting quarter.

Inflows of funds into fixed-income securities (including money market paper) added up to a net total of €2.7 billion in the reporting quarter. This positive development could be primarily associated with increased uncertainty about the creditworthiness of the United States and some euro-area countries in the first quarter of 2011. In particular, German longer-term Bunds were considered to be a safe investment and therefore benefited from strong inflows. Shares purchases amounted to €2 billion. The positive growth was most likely due to the domestic recovery and improved business climate in the first quarter. By contrast, investment funds experienced outflows of around €3.5 billion in the reporting quarter after a decline of around €1 billion a quarter earlier. It was particularly bond-based funds which sustained significant losses in the first quarter of 2011. By contrast, claims on insurance corporations once again rose perceptibly, by around €23 billion net. Other assets, too, recorded a significant rise of almost €15 billion.

In addition to the above-mentioned transaction-related rise in financial assets, there were capital losses of €10 billion on securities already held. On balance, this led to households holding financial assets amounting to €4,824 billion at the end of the first quarter of 2011.

Household debt fell slightly at the same time; on balance, just under €4 billion worth of loans (including other claims) were redeemed. At the end of the quarter, debt to banks and insurers totalled €1,534 billion. Net financial assets thus rose to a total of €3,291 billion.

Non-financial corporations: financial assets and external financing on the rise

Producing enterprises’ acquisition of financial assets (€41 billion) was considerably stronger than a quarter earlier (just under €25 billion). The strong increase was caused mainly by improved profitability following the economic recovery and the rise in demand from non-residents. Not only did purchases of shares increase, but lending by non-financial enterprises was also significantly expanded in the reporting quarter. Purchases of shares amounted to almost €6 billion in the first quarter of 2011, down quite a bit from the preceding quarter (around €19 billion). Loans, especially to other domestic enterprises, were up sharply, by contrast, at €21 billion. Trade credit to residents and non-residents likewise experienced strong growth. It rose by around €18 billion in the reporting quarter. At the same time, enterprises reduced other financial assets by around €19 billion.

In the first quarter of 2011, external financing was up by around €15 billion after having been scaled back in the fourth quarter of 2010 by around €3 billion. This was driven predominantly by growth in loans from non-banks, including mainly loans from other domestic enterprises, which increased by a total of more than €14 billion in net terms. Although the growth of this type of financing has been declining since the first quarter of 2010, the level is still relatively high. Trade and supplier credit increased by almost €12 billion and thus made a significantly greater contribution to corporate financing than on a multi-year average. Loans from domestic banks once again fell at an accelerated pace and were on balance reduced by around €21 billion. Financing through debt securities (including money market paper) increased on a quarter-on-quarter basis but was of relatively minor importance as a financing vehicle in the first quarter of 2011, accounting for some €8 billion.

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