ECB posts €1.6bn 2020 profit

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The European Central Bank (ECB) has posted a €1.6 billion profit for 2020, down from €2.4 billion in 2019, the bank said in a statement. The €722 million decrease compared to the previous year was mainly due to lower net interest income on foreign reserve assets and on securities held for monetary policy purposes. Following a decision by the Governing Council, there was also a transfer of €48 million to the ECB’s provision for financial risks, which reduced the ECB’s profit by an equivalent amount.

Total staff costs increased to €646 million from €566 million in 2019 as a result of the higher average number of staff in 2020, predominately in banking supervision, and higher charges in relation to post-employment benefits arising from the actuarial valuation at the end of 2020. Other administrative expenses decreased to €553 million from €590 million in 2019, mainly owing to a decrease in expenses related to external consultancy support and business travel.

The ECB’s profit is distributed to the euro area national central banks (NCBs). The Governing Council decided to make an interim profit distribution, amounting to €1.26bn, to the euro area NCBs on 29 January 2021. The Governing Council decided to distribute the remainder of the profit, amounting to €383 million, on 19 February 2021.

Total size of the ECB Balance Sheet rose by €112 billion to €569 billion (€457 billion in 2019). This increase was mainly due to the securities purchased under the pandemic emergency purchase programme (PEPP) and the asset purchase programme (APP).

At the end of 2020 the size of the consolidated balance sheet of the Eurosystem, which comprises assets and liabilities of the euro area NCBs and of the ECB vis-à-vis third parties, stood at €6,979 billion (€4,671 billion in 2019). The growth compared to the previous year was mainly due to the increase in Eurosystem refinancing operations, as a result of the third series of targeted longer-term refinancing operations (TLTRO III), and the securities purchased under the PEPP and the APP.

The Eurosystem’s holdings of securities held for monetary policy purposes rose by €1,063 billion to €3,695 billion (€2,632 billion in 2019). The APP holdings increased by €330 billion to €2,909 billion and the PEPP purchases amounted to €754 billion.

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