The European Central Bank’s net profit for 2015 was €1,082 million (2014: €989 million). Higher realised gains from the sale of securities in 2015 contributed to this increase.
Article continues below
e.[break]
Furthermore, in 2014 the ECB recovered expenditure incurred in relation to its supervisory tasks for November and December only, while in 2015 the costs for the entire year were recovered.
The Governing Council decided to make an interim profit distribution, amounting to €812 million, to the euro area national central banks (NCBs) on January 29, 2016. The Governing Council decided to distribute the remainder of the profit, amounting to €270 million, to the euro area NCBs on February 19, 2016.
The ECB’s income derives mainly from investment earnings on its foreign reserves portfolio and own funds portfolio, from interest income on its 8% share of the total euro banknotes in circulation and, in recent years, from net interest income arising from securities purchased for monetary policy purposes.
Net interest income totalled €1,475 million in 2015 (2014: €1,536 million).
It included interest income of €42 million earned on the ECB’s share of the total euro banknotes in circulation (2014: €126 million) and net interest income of €609 million (2014: €728 million) arising from securities purchased under the Securities Markets Programme (SMP), of which €224 million (2014: €298 million) arose from the ECB’s SMP holdings of Greek government bonds.
It also included net interest income of €120 million (2014: €173 million) arising from securities purchased under the first two covered bond purchase programmes and €161 million arising from securities purchased under the expanded asset purchase programme (APP) (2014: €2 million).
The ECB paid remuneration of €18 million (2014: €57 million) to the NCBs on their claims in respect of the foreign reserve assets transferred by them to the ECB, while interest income on foreign reserve assets amounted to €283 million (2014: €217 million).
Realised gains arising from financial operations amounted to €214 million (2014: €57 million).
Write-downs amounted to €64 million in 2015 (2014: €8 million). The higher write-downs in 2015 were mainly due to the overall decrease in the market value of the securities
held in the US dollar portfolio
The ECB’s administrative expenses consist of staff costs and all other administrative expenses.
The ECB’s assumption of its supervisory tasks has led to a gradual increase in staff numbers and consequently staff costs rose to €441 million in 2015 (2014: €301 million).
Other administrative expenses, comprising depreciation charges, rental of premises, professional fees and other goods and services, amounted to €423 million in 2015 (2014: €376 million). The increase in these expenses reflects mainly the commencement of the depreciation of the ECB’s new premises.
The expenditure incurred by the ECB in relation to its supervisory tasks was recovered via fees charged on supervised entities for the whole of 2015, while for 2014 only costs incurred in the last two months of the year were recovered.
This resulted in an increase in net income/expense from fees and commissions. The SSM-related fees for 2015 amounted to €277 million (Nov-Dec 2014: €30 million).
The total size of the ECB’s Balance Sheet increased by €72 billion to €257 billion in 2015 (2014: €185 billion). This increase was mainly due to the securities purchased under the APP, the appreciation of foreign reserve assets held by the ECB and the increase in banknotes in circulation.
The consolidated balance sheet of the Eurosystem [1] amounted to €2,781 billion at end-2015, compared with €2,208 billion at end-2014. The increase was mainly due to the continuing purchases of securities under the APP.
The Eurosystem’s holdings of securities held for monetary policy purposes increased by €586 billion to €803 billion (2014: €217 billion). Securities held under the SMP declined by €21 billion owing to redemptions.
This reduction was more than offset by securities purchased under the APP. On 31 December 2015 the APP holdings amounted to €650 billion (2014: €31 billion). ■