Friday

18th Aug 2017

ECB turns €1bn profit despite rising HQ costs

  • Laughing all the way to the bank - the ECB's redistributes the cash to national central banks (Photo: Valentina Pop)

The European Central Bank (ECB) recorded a profit of almost €1 billion in 2012, according to the Frankfurt-based institution's annual accounts, released on Thursday (21 February).

Its year-on-year profits soared by 37 percent to €998 million, with the bulk of the money coming from interest totalling €555 million on Greek government bonds.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Most of the ECB's income comes from interest on its foreign currency holdings and bond holdings, as well as on euro banknotes in circulation. It raked in just under €2.3 billion in interest in 2012.

Elsewhere, the bank revealed that it holds €218 billion worth of government bonds under the Securities Markets Program (SMP), launched in 2010 to bring down the cost of debt refinancing for the eurozone's crisis-hit countries.

The SMP, which earned €1.1 billion in interest for the ECB, was replaced in September 2012 by the Outright Monetary Transactions (OMT) scheme, an unlimited bond-buying program set up after ECB chief Mario Draghi promised to "do what it takes" to prop up the EU's single currency.

Nearly half of the ECB's €218 billion bond portfolio is composed of Italian debt, with a nominal value of €102.8 billion.

Spanish and Greek securities accounted for €44.3 billion and €33.9 billion, respectively, with the bonds having an average remaining maturity of 4.3 years.

The ECB stated that €575 million of the 2012 profit was shared across national central banks in January, with the remaining funds to be distributed on 25 February.

Meanwhile, all profits resulting from Greek bonds will eventually be re-directed back to Athens as part of the country's November bail-out deal agreed with eurozone finance ministers.

However, the ECB posted a €339 million hike in costs under its "assets under construction" heading, covering the costs of the bank's new headquarters.

The bank's new 45-floor building on the old site of the Grossmarkthalle, a 1920s listed-building that served as Frankfurt's wholesale food market, will eventually cost more than €1 billion - an overspend of more than €200 million since the tender was put out in 2008. The soaring costs of the building sit awkwardly at a time when the ECB has led the way in setting tough austerity policies for struggling eurozone countries.

The two-tower structure, which will house all of the bank's 2,600 staff from January 2014, will replace its rented Eurotower premises.

MEPs demand ECB transparency in bank union talks

EU officials are expecting to sketch out a deal within the coming weeks on two regulations that will govern the single supervisory mechanism co-ordinated by the European Central Bank.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Mixed Irish reactions to post-Brexit border proposal
  2. European Union returns to 2 percent growth
  3. Russian power most feared in Europe
  4. Ireland continues to refuse €13 billion in back taxes from Apple
  5. UK unemployment lowest since 1975
  6. Europe facing 'explosive cocktail' in its backyard, report warns
  7. Danish police to investigate misuse of EU fishing rules
  8. German constitutional court questions ECB's €2tn spending

Stakeholders' Highlights

  1. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  2. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  3. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  4. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  5. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  6. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  7. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  8. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  9. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  10. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  11. ACCAAnnounces Belt & Road Research at Shanghai Conference
  12. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides