The profits of the European Central Bank (ECB) for 2021 amounted to 192 million euros from 1.643 billion euros in 2020, according to the audited financial statements of the central bank.
The decrease of 1.452 billion euros compared to the previous year is mainly due to lower revenues from foreign exchange reserves and securities held for monetary policy purposes, as well as a transfer of funds to the forecast against financial risks, as announced by the ECB.
The Governing Council decided to transfer EUR 610 million to the provision for financial risks due to the higher degree of exposure to risk resulting mainly from the continuation of securities purchases for monetary policy purposes.
Net interest income amounted to a total of 1,566 million euros in 2021 (2020: 2,017 million euros). Net interest income on foreign reserves decreased to EUR 197 million (2020: EUR 474 million) as a result of the reduction in interest income on the portfolio in US dollars. Net interest income on securities held for monetary policy purposes decreased to EUR 1,006 million (2020: EUR 1,337 million), mainly due to the negative interest income from the pandemic emergency purchase program – PEPP).
Depreciation amounted to € 133 million (2020: € 26 million), mainly due to unrealized losses on price changes on securities held in the US dollar securities portfolio and equity portfolio.
The securities held in the ECB’s monetary policy portfolios, which are valued at amortized cost and are subject to impairment testing, are subject to impairment tests. According to the results of these audits, no impairment losses were recorded in these portfolios.
Total staff costs increased to € 674 million (2020: € 646 million) as a result of higher post-employment cost costs resulting from the annual actuarial valuation and higher average staffing. Other administrative expenditure increased to EUR 564 million (2020: EUR 553 million) mainly due to the increase in expenditure on property maintenance.
Revenue from supervisory fees, resulting from fees charged to cover the ECB’s expenditure in the performance of its supervisory functions, amounted to EUR 578 million (2020: EUR 535 million). The increase in 2021 is due to the continued development of information systems related to banking supervision and the higher staff costs.
The ECB’s profits are distributed to the national central banks (NCBs) of the euro area. The Board of Directors decided to make an interim distribution of profits, amounting to 150 million euros on January 31, 2022. At yesterday’s meeting, the Board of Directors decided to distribute the remaining profits, amounting to 42 million euros, on February 18, 2022.
The overall size of the ECB’s balance sheet increased by EUR 111 billion to EUR 680 billion (2020: EUR 569 billion). This increase is mainly due to the securities acquired under the PEPP program and the asset purchase program (APP).
At the end of 2021 the size of the Eurosystem consolidated balance sheet, which includes the assets and liabilities of the euro area NCBs and the ECB vis-.-Vis third parties, was € 8,566 billion (2020: € 6,978 billion). The increase compared to the previous year is mainly due to the securities acquired under the PEPP and APP programs and to the increase in Eurosystem refinancing operations as a result of the third series of targeted longer-term refinancing operations (APS III).
The holdings by the Eurosystem for monetary policy purposes increased by EUR 1,019 billion to EUR 4,713 billion (2020: EUR 3,694 billion). Securities held under the APP increased by EUR 214 billion to EUR 3,123 billion and securities purchases under the PEPP increased by EUR 827 billion to EUR 1,581 billion.
Source: Capital
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