Tuesday

6th Dec 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.

No euro crisis after Italian vote, says EU

The Italian PM's resignation after a failed constitutional referendum has not changed the situation, the Eurogroup president has said. Financial markets have remained stable.

Stakeholders' Highlights

  1. European Jewish CongressEJC President Breathes Sigh of Relief Over Result of Austrian Presidential Election
  2. CESICongress Re-elects Klaus Heeger & Romain Wolff as Secretary General & President
  3. European Gaming & Betting AssociationAustrian Association for Betting and Gambling Joins EGBA
  4. ACCAWomen of Europe Awards: Celebrating the Women who are Building Europe
  5. European Heart NetworkWhat About our Kids? Protect Children From Unhealthy Food and Drink Marketing
  6. ECR GroupRestoring Trust and Confidence in the European Parliament
  7. UNICEFChild Rights Agencies Call on EU to put Refugee and Migrant Children First
  8. MIRAIA New Vision on Clean Tech: Balancing Energy Efficiency, Climate Change and Costs
  9. World VisionChildren Cannot Wait! 7 Priority Actions to Protect all Refugee and Migrant Children
  10. ANCI LazioRegio-Mob Project Delivers Analysis of Transport and Mobility in Rome
  11. SDG Watch EuropeCivil Society Disappointed by the Commission's Plans for Sustainable Development Goals
  12. PLATO15 Fully-Funded PhD Positions Open – The Post-Crisis Legitimacy of the EU (PLATO)

Latest News

  1. Brexit deal must be done by October 2018, says EU negotiator
  2. Rising to the challenge of 'European Angst'
  3. Polish firm sues EU Commission over Gazprom privileges
  4. ID and police checks await all who enter and leave the EU
  5. Italy's Renzi to stay on to pass budget
  6. Dutch anti-Ukraine vote spawns 'app democracy' party
  7. EU agrees on debt measures for Greece
  8. EU scrambles to finalise gun-control reforms