22nd Oct 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

News in Brief

  1. Canada and Wallonia end talks without Ceta deal
  2. Juncker hopes for Canada accord in 'next few days'
  3. Romania drops opposition to Ceta
  4. Difficulties remain on Ceta deal, says Walloon leader
  5. Brexit could lead to 'some civil unrest' in Northern Ireland
  6. ECB holds rates and continues quantitive easing programme
  7. Support for Danish People's Party drops, poll
  8. Spain's highest court overturns Catalan ban on bullfighting

Stakeholders' Highlights

  1. EFADraft Bill for a 2nd Scottish Independence Referendum
  2. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  3. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  4. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  5. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  6. EASPDJoin the Trip! 20 Years on the Road. Conference & Photo Exhibition on 19-21 October
  7. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  8. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  9. Dialogue PlatformIs Jihadism Blind Spot of Western Intellectuals ? Wednesday 26 October
  10. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum
  11. Crowdsourcing Week EuropeMaster Crowdsourcing, Crowdfunding and Innovation! Conference 21 November - 10% Discount Code CSWEU16
  12. EJCEU Parliament's Roadmap for Relations with Iran a Massive Missed Opportunity