The European Central Bank (ECB) hardly made a profit in the second year of the Corona crisis in 2021.
The surplus fell from around 1.6 billion euros in the previous year to just under 0.2 billion euros, as the central bank announced on Thursday in Frankfurt.
The decline in profit is due, among other things, to lower income from foreign currency reserves.
Risk provisions have also been increased.
The ECB profit is distributed in full to the national central banks, including the Deutsche Bundesbank.
This in turn usually transfers most of its profits to the Federal Minister of Finance.
A large part of the ECB profit, 150 million euros, was already transferred to the national central banks on January 31st, the remaining 42 million euros should flow this Friday.
The Bundesbank accounts for slightly more than 26 percent of the paid-in capital of the ECB, in line with its share.
The ECB has been buying government and corporate bonds for years, originally intended to fight low inflation and support the economy.
In order to combat the economic consequences of the Corona crisis, the central bank also launched an emergency purchase program for government bonds and corporate securities worth billions in 2020 (“Pandemic Emergency Purchase Program”, PEPP).
Net purchases from this program are scheduled to end in March.
Net interest income fell to 1.566 billion euros in 2021 (2020: 2.017 billion).
In particular, yields from dollar paper declined.
Interest income on the bonds held also fell.
The balance sheet total of the ECB rose from 569 billion euros in the previous year to 680 billion euros.
The continued bond purchases are primarily responsible for the renewed increase.