ECB’s 2019 net profit increased by 50% from €1.57bn recorded in the previous year
Image: European Central Bank’s main building in Frankfurt, Germany. (Credit: Wikipedia.org/Epizentrum.)
The European Central Bank (ECB) announced that its net profit for 2019 was €2.36bn, increasing by €790m, compared to €1.57bn in 2018.
The surge in net profit has been attributed to an increase in income earned on US Dollar portfolio and on the asset purchase programme (APP) portfolio.
The central bank’s total net income for last year was €3.52bn, increasing by €832m from €2.7bn for 2018.
The ECB’s net interest income increased by €409m to €2.68bn last year, compared to 2.27bn posed in 2018.
The net interest income from APP for the period was €1.13bn and increased by €316m compared to 2018. The increase was due to higher average holdings and a higher average yield in public sector purchase programme (PSPP) during last year.
Also, due to redemptions, net interest income earned under the Securities Markets Programme (SMP) decreased to €291m for the year, compared to €384m for 2018.
Supervisory fee income, earned from fees charged to recover expenses incurred by the ECB in the performance of its supervisory tasks, was €537m compared to €518m for 2018. The increase has been attributed to higher average number of staff in banking supervision.
The central bank has also reported an increase in its 2019 total staff costs to €566m, compared to €515m for 2018, resulting from higher average staff in banking supervision and higher charges related to other long-term benefits from actuarial valuation during the end of last year.
Other administrative expenses were €590m, decreasing slightly compared to 2018. The decline is due to a decrease in expenses related to agency and external consultancy support services.
ECB’s balance sheet increases by 2% to €457bn
Realised gains from financial operations amounted to €197m last year and it has been owed to realised price gains on US Dollar-denominated securities. In 2018, it was a loss of €77m.
ECB’s balance sheet had also increased by 2% to €457bn, compared to €447bn in 2018. The increase has been attributed to the rise in the bank’s foreign reserve assets, as a result of increase in price of gold and an appreciation of the US dollar and the Japanese yen compared to euro for last year and also due to the increase in the value of euro banknotes in circulation.