Growth of Dutch SFIs weakened in 2013
The combined assets of special financial institutions (SFIs) in the Netherlands grew by EUR 156 billion (5%) to EUR 3,540 billion in 2013. This increase was smaller than in 2011 and 2012, when total assets were up by EUR 298 billion (10%) and EUR 234 billion (7%) respectively (Figure 1). The proportion of SFIs belonging to multinational corporations from emerging economies has increased rapidly over the past few years, as have assets in emerging economies.
Growth of SFIs weakened
SFIs are subsidiaries of foreign multinational corporations that play a part in those corporations' cross-border financial infrastructures. Their balance sheets comprise almost exclusively foreign assets and liabilities, and their incoming and outgoing cross-border transactions largely cancel each other out.
The combined assets of special financial institutions (SFIs) in the Netherlands grew by EUR 156 billion (5%), to EUR 3,545 billion in 2013. This increase was smaller than in 2011 and 2012, when total assets were up by EUR 298 billion (10%) and EUR 234 billion (7%) respectively (Figure 1). The number of SFIs went up slightly, to 14,400.
Figure 1. Change in total assets of Dutch SFIs
As in previous years, the increase of SFIs (measured by total assets) was largely driven by equity capital transactions (takeovers and restructurings) in 2013. In addition, the increase was dampened more than in previous years by other changes, most of which were relocations abroad, which means that activities were moved to different jurisdictions without being transferred to other legal entities. Such relocations ensure that the Dutch legal form is maintained while tax residency changes. The nature of an SFI makes relocation to a different jurisdiction relatively easy.
One-third of Dutch SFIs are affiliated with US multinationals
Measured by total assets, 34% of the SFIs belonged to US multinationals (EUR 1,213 billion; Figure 2) in 2013, while just under 15% formed part of groups from the United Kingdom (EUR 516 billion). Combined, SFIs belonging to multinationals from other EU countries made up 32% of total assets (EUR 1,143 billion). The remaining SFIs were part of groups from other OECD countries (EUR 241 billion, or 7%) and emerging economies (EUR 312 billion, or 9%).
Figure 2. Breakdown of SFIs' total assets according to group origin
Growing activity in emerging economies
The proportion of SFIs from emerging economies has increased markedly in recent years, from 4% in 2009 (EUR 101 billion) to 9% in 2013 (EUR 312 billion), and the proportion of SFIs from US multinational corporations was also up. SFIs from UK parent companies were virtually unchanged in terms of volume, at EUR 520 billion, but their proportion fell from 19% in 2009 to 15% in 2013, due mainly to the relocations noted above, such as HSBC's move to London.
The proportion of SFI assets in emerging economies likewise increased rapidly, from 6% in 2007 (EUR 152 billion) to 12% in 2013 (EUR 412 billion; Figure 3). Key destinations were Brazil (EUR 142 billion), Kazakhstan (EUR 36 billion), Mexico (EUR 35 billion) and Egypt (EUR 22 billion). The proportion of assets in the United States also grew, whereas the European proportion was down.
Figure 3. Geographical distribution of SFI assets, 2003-2013