Financial accounts statistics – commentary

for 3Q 2024

The overall situation

The total value of the financial assets in the Czech economy rose by 1.9% in 2024 Q3, indicating a quarter-on-quarter pick-up in growth. The year-on-year increase (7.9%) stayed at the level of the previous quarter. The total value of financial assets was favourably affected by transactions, which amounted to CZK 603.0 billion. The value of financial assets increased by a further CZK 454.0 billion due to revaluation. By contrast, non-transaction changes in the form of other changes led to a decrease in financial assets of CZK 41.0 billion. All economic sectors contributed to various extents to the growth in financial assets. The dominant sector was financial corporations, whose growth was due to changes in the commercial bank segment. The household sector came next, with an increase in volume that was half as large. It was followed by the rest of the world, non-financial corporations and, some way behind, general government. Financial corporations also dominated the liabilities side, with commercial banks holding a key position. Next came the rest of the world, whose contribution increased substantially compared to the previous quarter. The liabilities of general government also rose markedly. By contrast, non-financial corporations recorded a significant slowdown in the growth rate of liabilities. The contribution of households to the growth in total liabilities has long remained insignificant. 

The shares of the individual financial instruments in total financial assets and liabilities recorded no major changes. The biggest change was recorded for transferable deposits, whose relatively high quarter-on-quarter increase in value (4.9%) for the second consecutive quarter led to a 0.3 percentage point (pp) rise in their share. As in the previous quarter, the share of investment fund shares and units increased (0.2 pp). By contrast, the share of short-term debt securities decreased (-0.2 pp). The movements in the other financial instruments fluctuated around ± 0.1 pp. Turning to the sectoral breakdown, there were no substantial changes either. On the financial assets side, the shares of individual economic sectors were almost the same as a quarter earlier. On the liabilities side, the share of non-financial corporations decreased (-0.3 pp), mainly in favour of general government.  

Chart 1 – Breakdown of financial instruments in the economy
(in %)

Chart 1 Breakdown of financial instruments in the economy

Chart 2 – Breakdown of financial assets and liabilities by sector
(in CZK billions)

Chart 2 Breakdown of financial assets and liabilities by sector

Households again strengthened their net creditor position. The increase in net financial assets stayed at the previous quarter’s level. After weakening temporarily, the net financial position of financial corporations improved again. By contrast, the net financial position of the other economic sectors deteriorated. Following a temporary improvement in the previous quarter, general government increased its negative net financial assets. The creditor position of the rest of the world weakened for the fourth consecutive quarter. The rate of this weakening was considerably higher than in Q2. The negative net financial assets of non-financial corporations continued to grow.

Non-financial corporations

Financial assets and liabilities increased in value by 1.4% and 1.1% respectively quarter on quarter. The sector’s net financial position deteriorated. The growth in the value of negative net financial assets (0.6%) was due to negative revaluation, which was only slightly offset by positive other changes and a surplus on financial transactions.  

The value of unlisted shares on the assets side of the financial balance sheet increased, due solely to revaluation. The value of transferable deposits abroad increased. The growth in financial assets was also supported by an increase in the value of other equity due both to revaluation and transaction growth. The increase in the value of long-term loans was driven by growth in loans granted abroad and loans provided within the sector. The transaction increase in long-term debt securities was due mainly to the purchase of bank bonds and foreign debt securities. The decline in short-term loans owing to a significant drop in loans provided within the sector, which was partly offset by an increase in foreign loans, acted in the opposite direction. The liabilities side was affected by growth in the value of long-term debt securities, caused by their significant revaluation. The increase in the value of unlisted shares and other equity was also due to revaluation. Long-term loans from financial corporations, especially from commercial banks, also increased in value. The increase in liabilities was dampened by a decrease in short-term loans due to a reduction in loans provided within the sector. 

Turning to the structure of the financial balance sheet, the share of transferable deposits and unlisted shares on the financial assets side increased (0.3 pp in both cases) at the expense of a drop in other accounts receivable and short-term loans. On the liabilities side, growth in the share of long-term debt securities was accompanied by a decline in short-term loans and other accounts payable.

Chart 3 – Breakdown of financial assets and liabilities of non-financial corporations
(in CZK billions)

Chart 3 Breakdown of financial assets and liabilities of non-financial corporations

Financial corporations

The faster growth of financial assets compared to liabilities (2.2% and 1.8% respectively) led to an improvement in the sector’s net financial position. The decline in negative net financial assets of 6.7% reflected positive revaluation and, to a lesser extent, a surplus on transactions, which partly offset negative other changes. 

The increase in financial assets was driven by a rise in deposits, particularly deposits vis-à-vis the rest of the world. The value of shares and other equity increased due to revaluation and, to a lesser extent, transactions. The increase in loans was driven by a rise in loans to non-financial corporations. The growth in loans to households stayed at the previous quarter’s level. The rise in the value of long-term debt securities was due to significant revaluation. In addition, a high transaction increase in the value of investment fund shares and units was recorded for the second consecutive quarter. The growth in financial assets was dampened by a transaction decline in short-term debt securities. A drop in transactions accompanied by negative revaluation led to a further decline in the value of financial derivatives. The liabilities side was affected mainly by an increase in the value of transferable deposits and, to a lesser extent, other deposits. The growth in transferable deposits was driven by an increase in the deposits from the rest of the world and households. The increase in unlisted shares was due solely to their extensive revaluation. By contrast, the growth in the value of investment fund shares and units was driven mainly by transactions. The increase in liabilities was offset by a decline in the value of financial derivatives and loans.  

As regards sub-sectors, the largest improvement in the net financial position was recorded by the central bank due to a modest decline in liabilities amid growth in financial assets. The faster growth in financial assets than in liabilities fostered an improvement in the financial position of other financial intermediaries, collective investment funds and financial auxiliaries. An increase in financial assets accompanied by a drop in liabilities led to an improvement in the net financial position of pension funds. The slight decline in the negative net financial assets of captive financial corporations was a result of flat financial assets accompanied by a drop in liabilities. By contrast, other financial intermediaries again recorded a deterioration in the net financial position due to faster growth in liabilities than in financial assets. A decline in financial assets accompanied by growth in liabilities led to an increase in the value of negative net financial assets of insurance corporations. 

Chart 4 – Shares of sub-sectors in financial assets and liabilities of the financial sector
(in %)

Chart 4 Shares of sub-sectors in financial assets and liabilities of the financial sector

Chart 5 – Breakdown of financial assets in selected sub-sectors of the financial corporations sector
(in %)

Chart 5 Breakdown of financial assets in selected sub-sectors of the financial corporations sector

General government

Substantially higher quarter-on-quarter growth of liabilities compared to financial assets (4.1% and 2.2% respectively) led to an increase in general government’s debtor position. The value of negative net financial assets increased by 9.0% quarter on quarter due to negative financial transactions and revaluation of financial instruments. All three sub-sectors recorded a deterioration in their net financial position to varying degrees.

The financial assets side was affected mainly by an increase in other deposits with commercial banks. The value of unlisted shares rose due to revaluation. Loans also increased slightly, due mainly to an increase in short-term loans provided within the sector. The growth in financial assets was dampened by a decline in transferable deposits allocated within the sector. Other financial instruments had only a marginal effect in the quarter under review. On the liabilities side, the value of debt securities increased, due both to significant revaluation of long-term debt securities and growth in transactions at both maturities. Turning to the structure of government bond holders, an increase was recorded for investment by commercial banks and the rest of the world. Loans reflected growth in long-term loans from abroad and, to a lesser extent, short-term loans provided within the sector. The growth in liabilities was slightly offset by a decrease in transferable deposits accumulated within the sector.

Chart 6 – Breakdown of financial assets and liabilities of general government

(in CZK billions)

Chart 6 Breakdown of financial assets and liabilities of general government

Households

The quarter-on-quarter growth rates of financial assets and liabilities stayed at the level of the previous quarter (1.9% and 1.5% respectively). Net financial assets increased by 2.0% quarter on quarter due to positive revaluation and a surplus on financial transactions. Other changes were of secondary importance.

The financial assets side was affected by growth in transferable deposits. The value of investment fund shares and units increased again, due both to transactions and positive revaluation. Investment was channelled into both domestic and foreign funds. The increase in the value of unlisted shares was driven in roughly equal measure by transactions and revaluation. The increase in the value of other equity reflected solely their revaluation. The growth in financial assets was partly offset by a decline in other deposits, which was, more or less, to the same extent as in the previous quarter. Changes in the values of the other financial instruments were almost insignificant. The liabilities side was affected by an increase in loans (1.7%), which represent their key item. Deposit-taking corporations except the central bank remain the dominant lender (with a share of almost 97%). The loans provided by them increased by 1.7% quarter on quarter. The breakdown of loans was unchanged, with long-term loans accounting for the largest share (98%).

Chart 7 – Breakdown of financial assets and liabilities of households

(in CZK billions)

Chart 7 Breakdown of financial assets and liabilities of households

Rest of the world

The growth rates of financial assets and liabilities were substantially higher than in the previous quarter. The faster growth of liabilities compared to financial assets (2.7% and 1.9% respectively) led to a significant decrease in the value of net financial assets. Their quarter-on-quarter decline of 9.2% was due mainly to negative financial transactions and, to a lesser extent, negative revaluation of financial instruments. This was only slightly offset by positive other changes.   

On the financial assets side, the largest increase in value was recorded by debt securities. In the case of short-term debt securities, the growth was driven mainly by a transaction increase in government bonds held by the rest of the world. The growth in long-term debt securities was due to a transaction increase in holdings of government and bank bonds. The value of transferable deposits increased after two quarters of decline. Trade credits to domestic non-financial corporations continued to grow. The value of unlisted shares increased, due solely to revaluation. The rise in financial assets was dampened by a drop in other deposits, caused by a transaction decline in the value of other deposits received by commercial banks from abroad. The value of other equity decreased, due primarily to negative revaluation. An increase in deposits held abroad by the central bank was the key factor on the liabilities side. In the case of transferable deposits, it is worth mentioning deposits of non-financial corporations, which remained relatively high for the third consecutive quarter. Trade credits to foreign non-financial corporations continued to grow. Both listed and unlisted shares recorded a transaction increase in value. The increase in the value of investment fund shares and units was also driven mainly by transactions. The value of loans to non-financial corporations also rose. The increase in liabilities was offset by a transaction decline in foreign debt securities held by the central bank. 

Turning to the structure of the financial balance sheet, the changes on the financial liabilities side were more moderate. The share of debt securities increased (1.2 pp) at the expense of other deposits and other equity. On the liabilities side, the share of deposits rose (2.5 pp) amid a decline in debt securities (-2.8 pp).

Chart 8 – Breakdown of financial assets and liabilities of the rest of the World

(in CZK billions)

Chart 8 Breakdown of financial assets and liabilities of the rest of the World