Statistics Explained

Non-financial corporations - statistics on financial assets and liabilities


Data extracted in November 2021.

Planned article update: November 2022.

Highlights

Five Member States (Germany, France, the Netherlands, Ireland and Italy) accounted for a large majority of total EU financial assets (71.7 %) and of total EU liabilities (64.6 %) of non-financial corporations in 2020.

Out of the EU total for non-financial corporations in 2020, Equity and investment fund shares accounted for the largest part both of financial assets (50.0 %) and of liabilities (57.0 %)

Annual growth of total financial assets and liabilities of non-financial corporations, 2019 to 2020 (%)
Source: Eurostat (nasa_10_f_bs)

This article focuses on the annual stock of financial assets and liabilities for non-financial corporations in the European Union (EU) and the Euro Area (EA-19); note there is a complementary article that provides similar information for financial assets and liabilities of financial corporations financial assets and liabilities of households. This article also includes a comparison between these sectors.

The non-financial corporations sector comprises all private and public corporate enterprises that produce goods or provide non-financial services to the market.

Across the EU, the financial assets of non-financial corporations mainly comprise equity and investment fund shares, loans, other accounts receivable, and currency and deposits. The financial liabilities of non-financial corporations mainly comprise equity and investment fund shares, loans and other accounts payable.

The data presented in this article relate to a detailed set of non-consolidated financial balance sheets for the non-financial corporations sector released by Eurostat. Note that statistics detailing the financial accounts may be consolidated or non-consolidated; the latter record not only transactions between sectors but also transactions within the same sector.

The article provides an analysis of financial assets and liabilities of non-financial corporations across the EU and (EA-19), as well as for individual EU Member States, one of the EFTA countries (Norway) and one of the enlargement countries (Turkey) for the latest year available (2020). Some indicators are presented in relation to gross domestic product (GDP), which is beneficial for making cross-country comparisons, especially between countries of different size.

Full article

Assets and liabilities

Five Member States (Germany, France, the Netherlands, Ireland and Italy) accounted for a large majority of total EU financial assets (71.7 %) and of total EU liabilities (64.6 %) of non-financial corporations in 2020.

Total financial assets of non-financial corporations in the EU were valued at €19 009 billion in 2020, which was much lower than the value of their financial liabilities that stood at €33 742 billion. It resulted in a negative net asset position of €-14 733 billion in 2020 that is marginally lower than in 2019 when it stood at €-14 444 billion.

The annual growth rate for total financial assets and liabilities of non-financial corporations between 2019 and 2020 is illustrated in Figure 1. The EU annual growth rate was 3.4 % for assets and 2.8 % for liabilities.

Among the Member States, the highest annual growth rates for assets were observed in Romania (21.7 %), Lithuania (18.7 %) and Poland (15.6 %). These three countries had also the highest difference in growth rates between assets and liabilities. For liabilities, the Member States with the highest annual growth rates were Denmark (13.5%), Luxembourg (10.4 %) and Sweden (10.3 %). Turkey (enlargement country) had an even higher annual growth rate (35.4 % for assets and 39.1 % for liabilities). Five Member States had negative annual growth rates: Belgium (-6.5 % for assets and -5.0 % for liabilities), Ireland (-4.6 % for assets and -4.1 % for liabilities), Greece (-3.8% for assets and -1.5 % for liabilities), the Netherlands (-0.7 % for assets and -0.4% for liabilities) and Spain (-2.4 % for liabilities). It should be noted that growth rates are computed in national currency terms.


Figure 1: Annual growth of total financial assets and liabilities of non-financial corporations, 2019 to 2020 (%)
Source: Eurostat (nasa_10_f_bs)


The share of each EU Member State in the total financial assets and liabilities of non-financial corporations in the EU in 2020 is illustrated in Figure 2 below. Germany and France held around one fifth each of the financial assets and liabilities of non-financial corporations in the EU, followed by the Netherlands with around one tenth. In comparison, most of the other countries held less than 2 % each. Thus, five Member States (Germany, France, the Netherlands, Ireland and Italy) accounted for a large majority of total EU financial assets (71.7 %) and of total EU liabilities (64.6 %) of non-financial corporations.

For assets, non-financial corporations in Germany held the highest share (22.8 %) of financial assets held by non-financial corporations in the EU in 2020, followed by those from France (22.0 %), and the Netherlands (11.8 %).

Liabilities follows a pattern similar to that of assets. French non-financial corporations held the highest share (19.8 %) of EU financial liabilities, followed by non-financial corporations from Germany (18.8 %) and Italy (9.9 %).

Figure 2: Member States share of total financial assets and liabilities of non-financial corporations, 2020 (% of EU total)
Source: Eurostat (nasa_10_f_bs)


A comparison of the non-financial corporations sector’s positions in each of the EU Member States as a percentage of GDP, gives an additional perspective. Figure 3 below illustrates the financial assets and liabilities of non-financial corporations in 2020, as a percentage of GDP.

In 2020, the financial assets of EU non-financial corporations were valued at 141.9 % of GDP, while financial liabilities were valued at 251.9 %, resulting in the net assets equivalent to -110.0 % of GDP. Net assets were largely negative (i.e. the liabilities were greater than the assets) for all Member States, ranging from -287.5 % of GDP in Sweden to -59.7 % of GDP in Germany. Greece had the largest share of liabilities as a percentage of GDP compared to assets as a percentage of GDP, with liabilities (145.3 %) amounting to three times assets (36.9 %).

For all Member States, the value of liabilities as a percentage of GDP were above 100% in 2020, i.e. greater than GDP. The value was greatest in Luxembourg and Ireland, where the financial assets of non-financial corporations were valued at almost 6 times GDP, with financial assets as a percentage of GDP amounting to over three times GDP of the EU. However, the value of assets as a percentage of GDP is lower than 100% for 13 Member States.


Figure 3: Financial assets and liabilities of non-financial corporations, as a percentage of GDP, 2020 (%)
Source: Eurostat (nasa_10_f_bs)


Structure of assets and liabilities

Out of the total EU financial assets of non-financial corporations in 2020, Equity and investment fund shares accounted for the largest part of the total (50.0 %) followed by Currency and deposits (20.7 %), whereas for liabilities, the largest share is made up by Equity and investment fund shares (57.0 %) followed by Loans (28.5 %).

The assets and liabilities are presented through four prominent types of instruments, namely Currency and deposits, Loans, Equity and investment fund shares, and Other accounts receivable/payable. Four other forms of assets and liabilities (Monetary gold and special drawing rights (SDRs); Debt securities; Insurances, pensions and standardised guarantees; and Financial derivatives and employee stock options) accounted for small shares (each below 5.3 %) of total financial assets of EU non-financial corporations in 2020, and were grouped together in a category named Other Instruments. Monetary gold and special drawing rights (SDRs) was valued at zero for all countries for the whole sector.

The share of type of asset of non-financial corporations per Member State in 2020 is illustrated below, in Figure 4, and the respective data for liabilities are presented in Figure 5. While the shares of the instruments vary, the category Other instruments includes the same instruments for both assets and liabilities, for the purpose of readability of the two graphs.

Out of the total financial assets of EU non-financial corporations in 2020 (see Figure 4), Equity and investment fund shares accounted for the largest part of the total (50.0 %), followed by Currency and deposits (20.7 %), Other accounts receivable/payable (13.9 %) and Loans (12.6 %). In comparison, Other instruments accounted for only 2.9 %.

For total financial liabilities of EU non-financial corporations in 2020, (see Figure 5), the largest share is made up by Equity and investment fund shares (57.0 %) and Loans (28.5 %). Other accounts receivable/payable made up 7.2 %, and Currency and deposits only 0.2 %. Among Other instruments (7.2 %), a significant share of EU liabilities was due to the contribution of the instrument Debt securities (which corresponded to 5.5 % of the total value of EU liabilities in 2020).

A comparison of the structure of financial assets and liabilities shows that Currency and deposits made up 20.7 % of EU non-financial corporations’ assets in 2020, whereas it accounted only for a minor share (0.2 %) of liabilities.

For the share of type of asset of non-financial corporations per Member State, the principal instruments held by non-financial corporations in 2020 was Equity and Investment fund shares. Equity and investment fund shares was the largest category for 14 Member States; Other accounts receivable/payable was the largest category for 7 Member States; and Currency and deposits was the largest category for 6 Member States.

In six Member States, Equity and investment fund shares contribute to over half assets; Ireland (62.4 %), Germany (58.2 %), Luxembourg (57.7 %), Denmark (54.6 %), Belgium (54.0 %) and the Netherlands (52.2 %). In three Member States, it is Currency and deposits that contribute to over half of assets: Greece (73.4 %), Bulgaria (54.8 %) and Romania (53.0 %). For Other accounts receivable/payable, no countries have a share of over 50% with the largest share observed for Malta (45.2 %).

For the share of type of liabilities of non-financial corporation per Member State, the principal instruments held by non-financial corporations in 2020 were Equity and investment fund shares, Loans and Other accounts receivable/payable. Equity and investment fund shares account for over 50 % of liabilities in 21 Member States, and it is the largest category in all countries except Cyprus. In Cyprus, Loans represent 51.2 % of liabilities.


Figure 4: Share of type of assets of non-financial corporations, 2020 (% share of total financial assets of non-financial corporations)
Source: Eurostat (nasa_10_f_bs)


Figure 5: Share of type of liabilities of non-financial corporations, 2020 (% share of total financial liabilities of non-financial corporations)
Source: Eurostat (nasa_10_f_bs)


Developments in the EU and Member States

The value of financial assets as a percentage of GDP for Non-financial corporations was higher in 2020 than in 2019 in all Member States, with the exception of Ireland and Belgium.

In absolute terms, total financial assets by EU non-financial corporations grew continuously during the period 2011-2020, with the value growing in all years except for 2013. By 2020, the total value had increased by 59.2 %, from € 11 942 billion in 2011 to € 19 009 billion in 2020.

Total financial liabilities demonstrated a similar growth pattern over the same period, with the value growing in all years except for 2018, and increased from € 22 731 billion in 2011 to € 33 742 billion in 2020, amounting to a 48.4 % increase.

The value of financial assets as a percentage of GDP for non-financial corporations was higher in 2020 than in 2019 in all Member States, with the exception of Ireland and Belgium (see Figure 6 below). This ratio rose in the EU (up 8.2 %) from 2019 to 2020, as well as in all Member States plus Norway and Turkey, while it dropped by 8.8 percentage points in Ireland and 1.2 percentage points in Belgium.

In the Member States, the largest increase from 2019 to 2020 was observed in Romania (up 22.0 %), Lithuania (18.4 %), Malta (17.8 %) and Estonia (17.4 %).

Figure 6: Total financial assets of non-financial corporations as a percentage of GDP, 2019 and 2020 (%)
Source: Eurostat (nasa_10_f_bs)


Comparison between sectors

The relative contribution from the non-financial corporations sector is higher for total liabilities, whereas the contribution from households and non-profit institutions serving households is higher for total assets. The relative share of the financial corporations sector is similar for both assets and liabilities.

A comparison between sectors gives valuable insights into the differences between EU Member States. A comparison between the sectors (the financial corporations sector; the non-financial corporations sector; and households and non-profit institutions serving households) is illustrated in Figure 7 (Relative share of assets) and Figure 8 (Relative share of liabilities). Note that the sector General government has been excluded from this comparison, and thus the charts refer only to part of the domestic economy.

In the EU, the sector financial corporations makes up the largest share of assets (59.7 %) and liabilities (63.6 %), followed by non-financial corporations (15.0 % for assets, and 28.9 % for liabilities) and households and non-profit institutions serving households (25.4 % for assets, and 7.5 % for liabilities).

In all EU Member States, the value of financial assets held by financial corporations was at least double that of non-financial corporations. In most Member States, the financial assets of financial corporations were between two and four times as high as the financial assets of non-financial corporations, with much higher ratios in Luxembourg (36 times), Malta (18 times) and Cyprus (13 times as high).

The sector households and non-profit institutions serving households had a higher relative share for assets (around 30-40%) than for liabilities (around 2-12%). The opposite was true for the non-financial sector, which had a lower relative share for assets (around 10-20%) than for liabilities (30-40%). Thus, the relative share of the financial corporations sector remained similar for both Assets and liabilities.


Figure 7: Relative share of assets per sector (excluding general government), 2020 (% share of combined total assets for the three sectors)
Source: Eurostat (nasa_10_f_bs)


Figure 8:Relative share of liabilities per sector (excluding general government), 2020 (% share of combined total liabilities for the three sectors)
Source: Eurostat (nasa_10_f_bs)


Source data for tables and graphs

The detailed tables are available here Excel.jpg

Data sources

The compilation of financial accounts follows the European System of Accounts 2010 (ESA 2010).

The financial account and balance sheet

Eurostat’s website includes detailed financial accounts by country. Financial accounts are published in consolidated and non-consolidated forms; within this article the latter are presented. As a rule, the accounting entries in ESA 2010 are non-consolidated, as a consolidated financial account requires information on the counterpart grouping of institutional units. Note that data for the EU and euro area (EA-19) aggregates are calculated as a sum of data for EU Member States; no adjustment is made for flows between Member States.

The non-financial corporations sector

In general, sole proprietorships and most partnerships that do not have an independent legal status are considered to be part of the household sector, rather than as corporations (financial or non-financial). However, there are sometimes practical difficulties in delineating ‘quasi-corporations’ (unincorporated businesses with the characteristics of companies) between corporations on one hand and the household sector on the other, which may influence the scope and comparability of the data presented as well as the internal consistency of the full set of accounts.

Context

Financial accounts form part of the national accounting framework, and are compiled in the EU in accordance with ESA 2010. They are a significant tool for analysing financial developments and policy decisions, and provide key statistical information on financial transactions, other financial flows, and financial balance sheets by institutional sector, including non-financial corporations. Particular issues relating to the non-financial corporations sector include the indebtedness of the sector, its debt servicing burden and its impact on access to external finance as well as its capacity to withstand economic shocks. Indeed, since the global financial and economic crisis, financial accounts for non-financial corporations have been integrated into an enlarged set of policy indicators that are used to monitor private sector debt as part of the macroeconomic imbalance procedure (MIP) surveillance mechanism.

Financial accounts show how borrowers obtain resources by incurring liabilities or reducing assets, and how lenders allocate their surpluses by acquiring assets or reducing liabilities. The types of assets and liabilities that non-financial corporations hold carry different levels of risk and can be used to assess financial risk, vulnerability and welfare.

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