Explanatory Notes - Banks in the United Kingdom: service earnings from non-residents
OVERVIEW
AVAILABILITY
SOURCES
REVISIONS
DEFINITIONS
VALUATIONS AND BREAKS
FURTHER INFORMATION
This table records banks’ service earnings from non-residents comprising data series on commissions and fees and net spread earnings. A detailed quarterly breakdown of fees and commissions earned/paid by banks in the UK in their dealings with non-residents is collected. Total net spread earnings from banks’ dealing activities with non-residents is published.
Transactions in currencies other than sterling are translated into sterling at either the average rate during the period or the rate at the time of the transaction.
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.
Data are available quarterly for almost all series from 1992 Q1 (the sole exception relates to net commissions and fees – which starts from 1994 Q1). Selected series are available prior to 1992.
Publication of data will usually occur on the 21st working day of the month on the Interactive Database with the most recent quarter available in the publication for the third month after the end of the quarter.
Before 1986 estimates of banks’ service earnings from non-residents were based on periodic surveys. Data were amalgamated into the two broad categories: foreign exchange earnings and other earnings.
In 1986 a new annual survey form was introduced which covered net service earnings. In addition, data on management services provided to and by non-resident offices of banks in the UK were collected on the direct investment Form H1. These data have been included under miscellaneous earnings.
Quarterly data are available from 1992 when the BP Form was introduced. Data from 2004 Q1 are from the Form PL which replaced Forms A3 and BP.
Data on net spread earnings were collected from 2004 on the Form PL. Data prior to this period have been calculated from other data sources such as the Bank for International Settlements Triennial Survey of Foreign Exchange and Derivatives Market Activity.
These data are reported by UK-resident banks directly to the Bank of England on Form PL. The data were reported by all UK-resident banks at least annually up to 2006. There is now around 98% coverage from banks reporting at least annually. Coverage from quarterly data is around 92% with estimates derived for the other banks.
All data are subject to revision if and when new information becomes available. For more information on revisions practices see the Explanatory Note on revisions, available here.
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.
Commissions and fees: examples include commissions and fees related to foreign exchange transactions, new issues of securities, portfolio management, derivative transactions etc.
New issues of securities: Fees and commissions from non-residents arising from participation in the issue of new securities, sterling and foreign currency.
Portfolio management and security transactions: Fees and commissions from non-residents arising from securities trading and custodial services not covered above.
Commitment fees: Fees and commissions from lending activities and euronote facilities with non-residents (e.g. participation or front-end fees together with underwriting, commitment, facility and utilisation fees).
Credit and bill transactions: Fees and commissions from documentary credit activities as well as business in connection with the collection of bills (of exchange), clean credits, endorsements and reimbursement credits with non-residents.
Derivative transactions:Fees and commissions arising from transactions in derivatives with non-residents.
Other: Fees and commissions received from non-residents, not detailed elsewhere, in respect of, inter-alia, bank charges, executor and trustee services, computer bureau services administration of loans on behalf of other lenders etc.
Net spread earnings: Net spread earnings are a measurement of service income (value added) from dealing activities. The ‘spread’ is measured as the difference between the sale/purchase price and the mid market price at the time of the transaction.
Data are collected on an accruals accounting basis. The data are presented according to the guidelines in the International Monetary Fund’s (IMF) Balance of Payments Manual (fifth edition). The data are therefore compatible with the data published by the Office for National Statistics (ONS). However, the ONS banking sector data may include estimates for data that were not collected on the BP/PL Forms and other adjustments.
Relevant articles published in Bankstats:
- UK banks’ income and expenditure by Will Kerry and Daniel Wallace – March 2001
