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Other Financial Corporations

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This chapter looks at the trends in the other financial corporations sector (S.125, S.126, S.127) between 2009 and 2018. The sector is composed of other financial intermediaries (S.125), financial auxiliaries (S.126) and captive financial institutions and money lenders (S.127). Other financial intermediaries (S.125) include companies engaged in financial leasing and consumer and other lending, securitisation vehicles, derivative and security dealers, treasury companies and a range of other companies engaged in financial intermediation. The financial auxiliaries sector (S.126) includes companies which provide auxiliary financial services and other financial advisory and consultancy services such as loan brokers and investment advisors. They are companies which are principally engaged in activities closely related to financial intermediation, but which are not financial intermediaries themselves. The captive financial institutions sector (S.127) consists of financial corporations which are neither engaged in financial intermediation nor in providing financial auxiliary services. These include trusts, special purpose entities, money lenders, treasuries, certain types of sovereign wealth funds and holding companies that simply own the assets of subsidiaries. It should be noted that breaks may exist in the series for other financial corporations due to historic difficulty in obtaining sufficient data to fully measure the sector and increasing availability of new data sources.

In addition to providing aggregate trends for the three sectors, this chapter also looks at treasury companies separately from the S.125 and S.127 sectors, within which they are both classified.

(AF.2) Currency and Deposits(AF.3) Debt Securities(AF.4) Loans(AF.5) Equity and Investment Fund Shares/Units(AF.7) Financial Derivatives and Employee Stock Options(AF.8) Other Accounts ReceivableTotal
200931.507197.573580.133123.3831.73217.449951.777
201035.861221.964611.081154.081-0.40614.7231037.304
201131.91232.866661.97168.5781.09814.6171111.041
201220.239216.12637.821118.21-0.02511.8851004.25
201317.844202.383644.31143.2992.13848.8351058.81
201428.842219.427698.227145.915-2.79658.6661148.28
201546.918254.506799.211236.2736.42659.9841403.318
201632.64253.007788.006249.9683.07163.3881390.079
201732.449223.706691.799243.231.95369.1151262.252
201830.112252.799714.581284.5480.81162.5671345.418

Get the data: StatBank (IFI03)

Over the period 2009 to 2018 the assets of other financial corporations increased from €951.8bn in 2009 to €1,345.4bn in 2018. This was mainly driven by increases in debt securities (AF.3), loans (AF.4) and equity (AF.5). Loans (AF.4), at €714.6bn in 2018, accounted for more than 50% of the total assets.

(AF.3) Debt Securities(AF.4) Loans(AF.5) Equity and Investment Fund Shares/Units(AF.7) Financial Derivatives and Employee Stock Options(AF.8) Other Accounts ReceivableTotal
2009494.351362.42496.8773.87418.182975.709
2010527.407374.002106.0684.11119.4941031.083
2011537.497400.856118.9812.75321.321081.408
2012522.81358.28183.44911.01114.449990
2013404.495433.73580.4961.95396.3731017.053
2014396.332482.636181.8131.269110.7951172.845
2015472.902600.893242.0240.577113.1081429.503
2016430.326520.095270.7410.723109.9011331.786
2017378.942473.015294.63.087104.9421254.585
2018386.408520.426318.9230.931128.3611355.05

Get the data: StatBank (IFI03)

The total liabilities of other financial corporations also increased during the period 2009 to 2018. The main driving factors behind the increase were loans (AF.4), which increased from €362.4bn in 2009 to €520.4bn in 2018, and equity (AF.5), which increased from €96.9bn in 2009 to €318.9bn in 2018. Other accounts receivable (AF.8) increased by €81.9bn in 2013, from a value of €14.4bn in 2012, and stood at a value of €128.4bn in 2018.  

Legal, AccountingFeesComputer ServicesInsurance ServicesDepreciationWages and SalariesOther Operating CostsTotal
20120.105847403461.979736390740.074230944310.004817384240.16863543420.598863428470.77672759953.708858583
20130.077467353831.939107444850.07669529870.006851310310.16976247430.620128958981.028541860293.918554701
20140.085428446022.221497229240.06857114520.005885507680.054125345760.661139615490.675549905083.772197194
20150.0736584952.945038290.10204438160.0081327170.0798930630.9124538791.50261404115.623834867
20160.0961068833.2931273010.1055383670.007396274990.1056839010.887009888841.183802479145.678665095
20170.1688418973.5108181170.1707831570.0694144490.1377437111.0895924841.3593136076.506507422
20180.1883486433.6109376520.1605849470.0682428330.1257128070.9911313552.0620608527.207019089
Show Table: Table 6.1 Breakdown of Costs of Other Financial Corporations, 2012-2018

Figure 6.3 shows the breakdown of total costs in this sector by the type of cost. The largest share of costs is comprised of fees. Total costs changed very little between 2012 and 2014 but increased by almost €2bn in 2015. Costs have continued to increase since, with fees and other operating costs being the main driver of the increases.

Figure 6.4 shows the breakdown of costs in 2018. Fees constitute 50% of the total costs, while operating costs and wages and salaries 29% and 14% respectively.

2018
Legal, Accounting2.61340563517411
Fees50.1030676817734
Computer
Services
2.22817429809641
Insurance
Services
0.946894023135839
Depreciation1.74431072607917
Wages and
Salaries
13.7523065050952
Other
Operating
Costs
28.6118411306459
Gross Operating SurplusLabour CostsGross Value Added
20120.6486780010.5988634291.247541429
20130.2941812220.620128960.914310181
20141.1074520660.6611396151.768591682
20150.2775511920.9124538791.190005071
20160.5625055610.8870098891.44951545
20171.6299120891.0895924842.719504573
20181.0742404090.9911313552.065371764
Show Table: Table 6.2 Breakdown of Gross Value Added of Other Financial Corporations, 2012-2018

Figure 6.5 shows the evolution of gross value added in this sector and how this can be split into its components of gross operating surplus and labour costs. Labour costs have been relatively stable with an increasing trend, meaning that most of the volatility in gross value added is attributed to fluctuations in gross operating surplus. In 2018, labour costs stood at €1.0bn while gross operating surplus had a value of €1.1bn, resulting in gross value added of €2.1bn.

Production ValueIntermediate ConsumptionGross Value Added
20124.188901152-2.9413597221.247541429
20134.042973449-3.1286632690.914310181
20144.825523915-3.0569322341.768591682
20155.821492996-4.6314879251.190005071
20166.135486755-4.6859713051.44951545
20177.9986758-5.2791712272.719504573
20188.155546691-6.0901749272.065371764
Show Table: Table 6.3 Gross Value Added of Other Financial Corporations, 2012-2018

Figure 6.6 shows an alternative split of gross value added, into production value and intermediate consumption. While both production value and intermediate consumption have increased almost every year, the increases have not mirrored one another exactly. Consequently, gross value added fluctuates up and down from year to year, with a general upward trend. In 2018, the figures for production value and intermediate consumption were €8.2bn and €6.1bn respectively, resulting in gross value added of €2.1bn.

Total RevenueTotal CostsInterest ExpensesProfit
201221.435487678-3.708858583-13.3198746954.406754398
201319.29050394-3.918554701-10.8017688364.570180403
201419.211302137-3.772197194-10.7049501864.734154754
201519.322989236-5.623834867-8.6845716225.014582748
201625.329580807-5.678665095-12.6486933437.002222368
201723.118936265-6.506507422-14.986955641.625473203
201828.911135192-7.207019089-15.5417301086.162385995
Show Table: Table 6.4 Structure of Profit of Other Financial Corporations, 2012-2018

Figure 6.7 shows the evolution of profit before tax in this sector. Profit is calculated as the residual after subtracting costs and interest expenses from total revenue. These costs include labour costs, intermediate consumption and all other costs. Profit has increased every year except for 2017, when it decreased by €5.4bn from its 2016 value of €7bn to stand at €1.6bn. This decrease was mainly caused by reduced revenue and increased interest expenses. Profit increased again in 2018 to a value of €6.2bn, a similar level to that seen before 2017.

(AF.2) Currency and Deposits(AF.3) Debt Securities(AF.4) Loans(AF.5) Equity and Investment Fund Shares/Units(AF.7) Financial Derivatives and Employee Stock Options(AF.8) Other Accounts ReceivableTotal
201211.10426665241.07901841499261.32462927528.24911625-1.7211923354.517491816344.55333007299
20138.0902500266847.3576818710043248.4727030966330.773311578-0.255169561917.104358552341.543135562404
20148.59573122857.80210543253.34556992435.0970867711.64957203412.331082017368.821147403
201531.88926398768.123658949281.80534681186.217726585.48586369113.857555277487.379415295
20166.42202659357.067879199331.19004214111.237674883.4330217646.175566222515.526210798
20176.14867172727.31061933264.836416109100.1691066952.29565904213.134173828413.894646731
20187.73742037526.371851353288.465129301104.7327412471.2114504122.937188415431.455781103
Show Table: Table 6.5 Total Assets of Treasury Companies (by instrument), 2012-2018

The largest share of assets of treasury companies is that of loans (AF.4) which, at €288.5bn, accounts for 67% of the total assets of €431.5bn in 2018. Equity (AF.5) holdings have increased significantly from 8.2% in 2012 to 24.3% in 2018, as debt securities (AF.3) have decreased over the same period.

(AF.3) Debt Securities(AF.4) Loans(AF.5) Equity and Investment Fund Shares/Units(AF.7) Financial Derivatives and Employee Stock Options(AF.8) Other Accounts ReceivableTotal
201276.72215108409218.92203044148.0015125091.2865400477.699003982352.63123806309
201384.8546854366207.9324987178649.289441126450.9822151586.38081866853349.43965910744
201454.941396819243.32097604376.3728982940.6435523638.025396437383.304219956
201549.666489582315.729641078132.303782588-0.584173766.05577608503.171515568
201627.414460249303.871810131222.319725588-0.4874791856.092416693559.210933476
201720.732447892209.403582334220.4667352320.282279523.012437734453.897482712
201816.576830018251.312834089202.319677948-0.3099667173.154032294473.053407632
Show Table: Table 6.6 Total Liabilities of Treasury Companies (by instrument), 2012-2018

The breakdown of liabilities is similar to that of the assets. The main component of total liabilities is loans (AF.4) which accounted for 53% of the €473.1bn total liabilities in 2018. The share of equity (AF.5) has increased from 14% to 43% between 2012 and 2018, again largely replacing debt securities (AF.3).

After several years of an increases, the total size of the balance sheet fell in 2017 for the first time since 2013, mainly due to a decrease in loans (AF.4) assets and liabilities.

ResidentNon-resident
201219.64045805207780.359541947923
201319.396343322766180.6036566769411
201416.512758291881183.4872417081189
201520.093111335185479.9068886648146
201627.465099050895772.5349009491043
201727.130711517000872.8692884829992
201825.234448815511174.7655511844889
Show Table: Table 6.7 Total Assets of Treasury Companies (by residency), 2012-2018

The shares of Irish and foreign assets held by treasury companies are relatively stable between 2012 and 2015, with approximately 20% Irish assets and 80% foreign assets. In 2016, the non-resident share of assets decreased to 73%, and again remained around this level until 2018.

ResidentNon-resident
201220.348958701486979.6510412985131
201319.682545240765980.3174547592341
201417.218956721002582.7810432789975
201520.191842907544279.8081570924558
201636.629444301412463.3705556985876
201740.176588687694659.8234113123054
201831.11662477516968.883375224831
Show Table: Table 6.8 Total Liabilities of Treasury Companies (by residency), 2012-2018

Similar to the assets of treasury companies, liabilities are also approximately 20% Irish and 80% foreign between 2012 and 2015. In 2016 and 2017 the share of assets held in Ireland increased to 37% and 40% respectively, decreasing again in 2018 to 31%.


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