Further details about monetary financial institutions in the UK: Income and expenditure vis-à-vis non-residents data

The Database contains selected income and expenditure data of Monetary Financial Institutions (MFIs) in the UK receivable from and payable to non-residents comprising data series on commissions and fees and investment income.

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Overview

Investment income data are broken down into Direct income (branches’ profits and losses and ‘Other’), Portfolio income and ‘Other’ income. Net data are shown for all items except Portfolio investment and Total income.

The sign convention used is also consistent with that used by the Office for National Statistics (ONS) in their Balance of Payments accounts. This shows both amounts receivable (called ‘credits’ by the ONS) and payable (‘debits’) with a positive sign.

Availability

Data are available quarterly for almost all series from 1998 Q1. The sole exceptions relate to net commissions and fees which starts from 1994 Q1 and income payments on security lending, which starts in 1999 Q1.

Publication via the Database will usually occur on the 21st working day of the month. Data for the most recent quarter are made available in the third month after the end of the quarter. For example, data for Q1 will be made available around the 21st working day of June.

Following the transition of building societies statistical reporting from the FSA to the Bank of England on 1st January 2008, all series in this hierarchy include building society data from 2008 Q1 data onwards.

Sources

Data up until end 2003 are taken from the Form A3. Data from 2004 Q1 are from the Form PL which replaced Forms A3 and BP. Annual data were reported by all UK-resident banks up to 2006. There is now around 98 per cent coverage from institutions reporting on an annual basis, based on gross assets/liabilities as reported quarterly on Form BT. Coverage from institutions reporting on a quarterly basis is around 95 per cent, with estimates derived for the other banks. Building society data reported on Form PL are included from 2008 Q1, with coverage similar to that for banks. Estimates are derived for other building societies.

Revisions

All data are subject to revision if and when new information becomes available. For more information on revisions practices see further details about revisions.

Definitions

Non-residents are defined as economic units that have a centre of economic interest outside the domestic economic territory. UK economic territory excludes the Channel Islands and the Isle of Man.

Direct investment relationships arise when a direct investor directly owns equity that entitles it to 10 per cent or more of the voting power in the direct investment enterprise.

Trade in services

Trade in services are defined as:

Net Commissions and fees: examples include commissions and fees related to foreign exchange transactions, new issues of securities, portfolio management, derivative transactions etc.

Net spread earnings from business with non-residents. Net spread earnings aim to capture the service income from dealing activities. They reflect the margin earned from a banks’ dealing transactions between the transaction price and the mid-market price at the time of the transaction.

Exports of financial services indirectly measured (FISIM). FISIM is estimated by the Bank of England to account for the implicit revenue received by banks for providing loans and deposits. It is calculated as the difference between the amount of interest charged on loans and deposits and the interest that would have been charged at a risk-free reference interest rate.

Direct investment income: A direct investment relationship is defined as where one company owns 10 per cent or more of the equity capital in another company. 

An operation is defined as a branch of a company where it is part of that legal entity but operating in a different company.

A subsidiary is a direct investment enterprise in which an investor owns more than 50 per cent of its voting power i.e. it is controlled by the investor or where the reporting entity has Control of the Board of Directors.

An associate is a direct investment enterprise in which an investor owns directly at least 10 per cent of the voting power and no more than 50 per cent.

Investment income
Investment income comprises:

Direct investment income on outward investments comprises:

  • profits(+) or losses(-) of non-resident branches and subsidiaries of UK-owned MFIs earned over the period
  • dividends received from subsidiaries

Direct investment income on inward investments similarly comprises:

  • profits(+) or losses(-) of banks operating in the UK that are themselves branches or subsidiaries of non-resident companies
  • dividends paid to those non-resident companies

Portfolio investment income (receivable): this mainly comprises;

  • dividends received from holdings of equity issued by non-residents (not included in direct investment income)
  • income receivable on bonds and notes, floating rate notes (FRNs), certificates of deposit, commercial paper and other paper issued by non-residents

Other investment income: this mainly comprises;

  • loans and advances (or deposits)
  • all interest receivable from (or payable to) non-residents on repo/reverse repo transactions
  • From 1999 Q1, other income payable includes payments by UK banks on their security lending from non-residents

Other income receivable/payable excludes FISIM charged by UK banks on their loans to and deposits from non-residents.

Valuation and Breaks

Data are collected on an accruals accounting basis except for dividends which are collected on a cash basis. The data are presented according to the guidelines in the International Monetary Fund’s (IMF) Balance of Payments Manual (sixth edition). The data are therefore compatible with the data published by the ONS. However, the ONS banking sector data may include estimates for data that were not collected on the Bank of England Forms and other adjustments.

Data for building societies are included with effect from 2008 Q1.

From 2009 Q2 data on banks and building societies’ covered bond entities are included on a consolidated basis.

From 2010 Q1 data on banks’ and building societies’ securitisation special purpose entities are included on a consolidated basis.

Further information

Revisions to UK GDP and the Balance of Payments current account sourced from Bank of England by Lauren Bowers and Katrina Farrell, (2014), Statistics article, September.
Analysis of UK resident monetary financial institutions’ profit and loss statistics by Lauren Bowers, (2014) Statistics article, June.
Annual profit and loss of UK resident Monetary Financial Institutions by Perry Francis, (2011) Statistics article, April.
UK banks' income and expenditure by Will Kerry and Daniel Wallace, (2001) Statistics article, March.

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This page was last updated 31 January 2023