2024-02-22 11:57:06
This net loss is the first recorded by the Frankfurt institution since 2004, 1.6 billion at the time, and represents the fourth consecutive annual decline in results, since the profit of 2.4 billion euros in 2019 , according to a press release published Thursday.
The 2023 result would have been negative by 7.9 billion euros without the drying up of the provision for risks, to the tune of 6.6 billion euros, which made it possible to partially absorb this loss.
Thanks to this financial cushion, the ECB was still able to post a balanced balance in 2022 instead of a loss.
The turnaround, following “nearly two decades of substantial profits”, “reflects the role and necessity” of the action of the ECB and national central banks to fight inflation, explains the institution.
The ECB has increased borrowing costs at an unprecedented pace since July 2022, following the war in Ukraine pushed up energy and food costs. Its rates have been kept unchanged at a new record since October 2023
The higher rates have “led to an increase in interest charges” paid to euro zone central banks, the statement said. Result: a bill of more than 14 billion euros in interest last year, compared to 2 billion in 2022.
At the same time, the interest received on the mass of bonds accumulated by the ECB during the years of fighting the crisis has not followed. These assets have fixed interest rates and long maturities, and were purchased when borrowing costs were very low.
This jaws effect in the financial accounts means that the ECB should “suffer losses over the coming years”, according to its annual report.
She then expects “sustained profits”, without specifying from when. This will depend on the speed of its balance sheet reduction and the fall in rates.
The 2023 loss will, however, “compensate for future profits”, decided the ECB Governing Council.
The financial solidity of the guardian institution of the euro is assured, with equity of nearly 46 billion euros, including significant revaluation reserves, according to this report.
The loss suffered last year will therefore have “no impact on (the) capacity to pursue an effective monetary policy”, explains the institution.
Just like the ECB, the national central banks of the euro zone are expected to post, for some of them, heavy losses for 2023.
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