Financial accounts statistics – commentary

for 4Q 2024

The overall situation

The total value of the financial assets in the Czech economy rose by 1.3% in 2024 Q4, indicating a quarter-on-quarter slowdown in growth. The year-on-year increase (7.7%) was just below the previous quarter’s level. The total value of financial assets was favourably affected by revaluation totalling CZK 369.9 billion. The value of financial assets increased by a further CZK 220.7 billion as a result of transactions. Other changes (CZK 92.7 billion) also acted in the same direction. The current financial situation was partly affected by the optimisation of commercial banks’ balance sheet structures at the end of the year related to applicable regulatory requirements. All economic sectors except general government contributed to various extents to the increase in financial assets. The largest increase in volume terms was recorded by households, closely followed by non-financial corporations and the rest of the world. The low contribution of financial corporations was due to a significant decline in assets within the segment of commercial banks. The reduction in the value of the financial assets of general government was driven by an extraordinary decline in the local government sub-sector. The rest of the world dominated on the liability side, followed a long way behind by non-financial corporations and financial corporations. The contribution of households was roughly the same as a quarter earlier. General government recorded a marginal increase in liabilities.  

The shares of the individual financial instruments in total financial assets and liabilities recorded bigger changes than in the previous quarter. The biggest change was recorded by deposits, whose share fell by 1.1 pp quarter on quarter. At the same time, changes in their structure were reflected in the largest change in shares of the individual financial instruments (0.9 pp for transferable deposits and -1.9 pp for other deposits). However, the size of the observed shifts is broadly in line with the monitored long-term quarterly changes typical of the last quarter of the year. There was an increase in the proportion of shares and other equity (by 0.4 pp), short-term securities and long-term loans. Turning to the sectoral breakdown, the share of financial corporations fell on both sides of the financial balance sheet – on the financial assets side, in favour of non-financial corporations and households, and on the liabilities side, due to an increase in the share of non-residents.  

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

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

Households again strengthened their net creditor position. However, the increase in net financial assets was considerably higher than in the previous quarter. Non-financial corporations also recorded an improvement in their net financial position. By contrast, the net financial position of the other economic sectors deteriorated. The negative net financial assets of financial corporations increased again following a temporary improvement in the previous quarter. The negative net financial assets of general government also rose for the second consecutive quarter. The net creditor position of the rest of the world weakened significantly.

Non-financial corporations

An increase in the growth rate of financial assets from 1.4% to 2.2%, accompanied by a slight decline in the growth rate of liabilities (to 0.7%), led to an improvement in the net financial position of the sector. The value of negative net financial assets declined by 1.2% owing to a positive balance on financial transactions, which was partially offset by negative revaluation of financial instruments. 

Financial assets were affected mainly by an increase in transferable deposits with commercial banks and, to a lesser extent, by deposits held abroad. The strong transaction growth in trade credits provided to non-residents continued for the fourth consecutive quarter. The value of unlisted shares was also positively affected by transactions. The growth in financial assets was dampened by a decline in the value of other deposits accumulated in commercial banks. The decline in the value of short-term loans was due to a reduction in loans provided within the sector, which partially offset the growth in loans extended to non-residents. Non-transaction changes in the form of other changes led to a decrease in the value of other equity. On the liabilities side, long-term loans recorded the highest growth in volume, due to an increase in loans from abroad. The rise in the value of listed shares was solely due to revaluation. By contrast, the increase in the value of other equity was driven by transactions. The liabilities side was negatively affected by a drop in short-term loans provided within the sector, which only partially offset the increase in loans from abroad. The value of trade credits provided to non-residents also recorded a significant decline.  

Turning to the structure of the financial balance sheet, the shares of transferable deposits (by 2.0 pp) and other accounts receivable on the financial assets side increased  at the expense of loans and other deposits. On the liabilities side, the most significant changes were seen in the structure of loans, where short-term loans decreased by 0.5 pp amid a 0.4 pp increase in long-term loans.

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

Financial corporations

The growth rate of financial assets and liabilities decreased compared to the previous quarter (0.2% and 0.5% respectively). The sector’s net financial position deteriorated. The growth in negative net financial assets (5.0%) was due almost equally to a negative balance on financial transactions and revaluation.

The growth in financial assets was driven by a transaction increase in long-term debt securities – foreign bonds and, to a lesser extent, general government bonds. The value of long-term loans also rose. The increase in the value of listed shares was due mainly to non-transaction effects in the form of other changes and revaluation. The increase in the value of other equity was also due to revaluation. A high transaction increase in the value of equity and investment fund shares can also be observed for the third consecutive quarter. By contrast, other deposits recorded a significant drop. On the liabilities side, short-term debt securities held by non-residents increased. The value of unlisted shares rose due to revaluation. The transaction increase in the value of equity and investment fund shares and transferable deposits continued. Growth in liabilities was dampened by a decline in other deposits.

As regards sub-sectors, the central bank recorded an improvement in its net financial position due to much faster growth in financial assets than in liabilities. The financial asset side was substantially affected by a transaction increase in foreign debt securities. Faster growth of financial assets than liabilities fostered an improvement in the net financial position of insurance corporations. The net financial position of the other financial sub-sectors deteriorated. The increase in negative net financial assets of deposit-taking corporations except the central bank was due to a larger decrease in financial assets than in liabilities in volume terms. A higher growth rate of liabilities than of financial assets led to a further deterioration in the net financial position of captive financial institutions. A larger increase in liabilities than in financial assets resulted in a deterioration of the net financial position of financial auxiliaries, collective investment funds, other financial intermediaries and pension funds.

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

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

General government

A slight increase in liabilities accompanied by a decline in financial assets (0.3% and -1.1% respectively) led to a deterioration in the sector’s net financial position. The value of negative net financial assets increased by 3.7% quarter on quarter due to a negative balance on financial transactions, which was partly offset by positive revaluation of financial instruments. A deterioration in net financial position was recorded by local government and social security funds.

The financial assets side was affected mainly by a decrease in other deposits with commercial banks. The value of other equity decreased to a much lesser extent, due both to revaluation and negative transactions. The drop in the value of short-term debt securities reflected a transaction decrease in bonds of commercial banks. Finally, transactions also had a negative impact on the value of other accounts receivable. By contrast, transferable deposits with the central bank recorded growth. Two-thirds of the increase in long-term loans was due to loans provided to the rest of the world. The remainder were loans provided within the sector. The value of listed shares rose solely due to revaluation. The liabilities side was affected by an increase in transferable deposits provided both within the sector and by non-financial corporations. The value of long-term loans also rose. The growth in liabilities was reduced by a transaction decline in short-term debt securities held by non-residents and commercial banks. The value of long-term debt securities and other accounts payable also declined, albeit to a lesser extent.

Chart 6 – Breakdown of financial assets and liabilities of general government
(in CZK billions)

Households

Higher quarter-on-quarter growth in financial assets than in liabilities (2.4% and 1.4% respectively) led to an improvement in the overall financial position. The sector’s net financial assets increased by 2.7% quarter on quarter owing to a positive balance on other changes and transactions, and to a lesser extent also to revaluation. 

The value of financial assets was affected mainly by growth in unlisted shares. Half of this increase was due to other changes, consisting in sector reclassification. Revaluation (an increase in own funds at book value) also played a significant role. By contrast, transactions only had a marginal impact. In addition, the value of transferable deposits with commercial banks rose markedly. The growth in the value of equity and investment fund shares continued, driven mainly by transactions, which accounted for 65% of their total increase in value. Investment was channelled into both domestic and foreign funds. The increase in the value of other equity was due to revaluation. The growth in financial assets was reduced by a decline in other deposits, observed for the third consecutive quarter. Other deposits currently account for 23% of total household deposits. Negative revaluation led to a decline in the value of listed shares. The liabilities side was driven again by an increase in loans (1.6%), which represent their key item. Deposit-taking corporations except the central bank remain the dominant lender (with a share of almost 97%). The volume of 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)

Rest of the world

A pick-up in growth in liabilities from 2.8% to 4.4% amid virtually unchanged growth in financial assets (2.1%) led to a significant deterioration in the net creditor financial position. Net financial assets dropped by 29.1% quarter on quarter. Negative balance on other changes, revaluations and transactions contributed more or less equally to this decline. 

On the financial assets side, the largest increase in value was recorded by short-term debt securities, due to increased purchases of domestic bank bonds by non-residents. Loans showed an unprecedented increase in value from the long-term perspective. Most of these were loans drawn by domestic non-financial corporations from abroad. The rise in long-term loans to general government is worth mentioning. Shares and other equity recorded a significant transaction increase in value. The growth in financial assets was offset by a decline in other deposits held by non-residents with both commercial banks and the central bank. The value of trade credits provided to domestic non-financial corporations also fell. The decrease in long-term debt securities was driven by negative revaluation of government bonds. On the liabilities side, the growth in trade credits provided to foreign non-financial corporations continued – a rising trend observed for the fourth consecutive quarter. The value of shares and other equity increased due to other changes and transactions. A transaction increase in foreign debt securities held by the central bank raised the value of debt securities. The value of loans to non-financial corporations and general government also increased. Transferable deposits held abroad by non-financial corporations and the central bank also recorded growth. Other changes and transactions had a positive impact on the value of equity and investment fund shares. By contrast, the value of other deposits held abroad by the central bank dropped. 

Turning to the structure of financial instruments, there was an increase in the share of short-term debt securities and loans at the expense of other deposits and trade credits on the asset side of the balance sheet. On the liabilities side, the decline in the share of other deposits was offset by an increase in trade credits and loans.

Chart 8 – Breakdown of financial assets and liabilities of the rest of the World
(in CZK billions)