Quarterly Bulletin Q3 2013

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46 Financing Developments Quarterly Bulletin 03 / July 13 in the Irish Economy Chart 11: Total Assets of Irish Resident FVCs per Vehicle Type Chart 12: Number of Reporting Irish Resident FVCs and Total Assets 600 € billion 800 € billion Number Reporting 800 500 700 700 400 300 600 600 576.1 200 100 500 543.8 533.7 516.6 499.6 481.1 469.4 457.2 441.9 450.2 500 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 400 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 400 2011 2012 2013 2010 2011 2012 2013 ABCP Programme Cash CDO CMBS Consumer ABS Corporate ABS Multi-Issuance Vehicles (MIVs) Other RMBS Synthetic CDO Total Assets (Billions) Number of Reporting Irish Resident FVCs Source: Financial Vehicle Corporation Statistics, Central Bank of Ireland. Source: Financial Vehicle Corporation Statistics, Central Bank of Ireland. a large outflow of €29 billion in securitised loans originated by euro area MFIs. This fall contributed to an increase in Ireland’s share of euro area assets, from 21.6 per cent in Q4 2012 to 22.3 per cent in Q1 2013. 350 300 Chart 13: NFC Debt as a Percentage of GDP € billion % 220 200 250 180 Non-Financial Corporations 200 160 Non-financial corporation (NFC) debt 9 decreased during Q4 2012 to €300 billion, or 184 per cent of GDP, as seen in Chart 13. This represented a decline of €22 billion, or 14 per cent of GDP, compared with the previous quarter. In Q4 2012, NFC debt was at its lowest level since Q3 2010. A large proportion of the reduction in debt is attributable to a decrease in the NFC reporting population, following the relocation of headquarters by some companies out of Ireland. The reduction in NFC debt contributed towards an improvement in the ability of Irish NFCs to manage their debt, as assessed using 150 100 50 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Debt (LHS) Debt as a percentage of GDP (RHS) Sources: Quarterly Financial Accounts, Central Bank of Ireland; and Quarterly National Accounts, CSO. 140 120 100 80 9 NFC debt is defined as the sum of its ‘securities other than shares’ and ‘loans’ liabilities. The NFC sector’s loan liabilities are now presented on a gross basis. This means that outstanding amounts for NFC loans include all impairment provisions recognised against the sector’s loans. Debt is non-consolidated, meaning that inter-company debt is included.
Financing Developments in the Irish Economy Quarterly Bulletin 03 / July 13 47 Chart 14: NFC Debt to Financial Assets and Liabilities Chart 15: NFC Net Lending/Net Borrowing on a Four-Quarter Moving Average Basis 70 % 20 € billion 60 15 (Net Lender) 50 10 5 40 0 30 -5 20 -10 10 -15 (Net Borrower) 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007 2008 2009 2010 2011 2012 -20 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Debt as a % of financial assets Debt as a % of liabilities Acquisition of Financial Assets Incurrence of Financial Liabilities Source: Quarterly Financial Accounts, Central Bank of Ireland. Net Lending/Net Borrowing Source: Quarterly Financial Accounts, Central Bank of Ireland. two approaches presented in Chart14. These two approaches to analysing debt are NFC debt as a percentage of financial assets and NFC debt as a percentage of total liabilities. The former declined by 1.9 per cent over the quarter, to 47.5 per cent in Q4 2012. The ratio of NFC debt as a percentage of total liabilities declined during Q4 2012 by 1.2 per cent, to 38 per cent. The decline in the reporting population impacted both financial assets and liabilities. Multinational NFC Developments The trend of foreign investment by Irish-owned multinational NFCs continued in Q1 2013, where nearly €10 billion was invested abroad over the quarter. Direct investment income earned abroad by Irish-owned multinational NFCs remained steady at just over €4 billion during Q1 2013. A significant portion of direct investment income earned is attributable to multinational NFCs which have established their headquarters in Ireland, with the remaining income related to foreign earnings of Irish-owned multinational NFCs. Investment income paid abroad to foreign direct investors fell by nearly €2 billion during Q1 2013. Despite a fall in NFC debt levels in Q4 2012, foreign-owned multinational NFCs continued to reinvest in their Irish operations. Foreign direct investment inflows amounting to €16.7 billion were recorded during Q1 2013, primarily comprised of equity inflows. The volume of foreign investment in Irish-based foreignowned multinational NFCs was €385 billion at end-March. The NFC sector was a net lender during Q4 2012, as shown in Chart 15 10 . The chart shows that NFC net lending amounted to €2.7 billion over the quarter, which was the lowest level since Q4 2009. NFCs invested €9 billion in financial assets over the quarter, which was in excess of incurred liabilities of €6.3 billion. Both the investment in assets and the incurrence of liabilities were at their highest since Q4 2008. 10 The NFC net lending/net borrowing position is measured as a four-quarter moving average, to adjust for seasonality.
Page 1: JULY 13 Q3 Central Bank Quarterly B
Page 5 and 6: Contents Section 1 Forecast Summary
Page 7 and 8: Section 1 Quarterly Bulletin 03 / J
Page 9 and 10: 7 Comment Annual National Accounts
Page 11 and 12: 9 The Domestic Economy Overview n A
Page 13 and 14: The Domestic Economy Quarterly Bull
Page 33 and 34: 31 An Timpeallacht Gheilleagrach Le
Page 35 and 36: 33 Financing Developments in the Ir
Page 37 and 38: Financing Developments in the Irish
Page 47: Financing Developments in the Irish
Page 55 and 56: 53 Developments in the Internationa
Page 57 and 58: Developments in the International a
Page 73 and 74: 71 EU-IMF Financial Assistance Prog
Page 75 and 76: EU-IMF Financial Assistance Program
Page 77 and 78: EU-IMF Financial Assistance Program
Page 79 and 80: 77 Developments in EU Financial Ser
Page 81 and 82: Developments in EU Financial Servic
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Page 85 and 86: Section 2 Quarterly Bulletin 03 / J
Page 87 and 88: Analysis of Recent Monetary Operati
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Analysis of Recent Monetary Operati
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Section 3 Quarterly Bulletin 03 / J
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Statistical Appendix Quarterly Bull
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Quarterly Bulletin Q3 2013

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