ECB profit cut to €192m; balance sheet hits €680bn

European Central Bank HQ in Frankfurt

The European Central Bank’s (ECB’s) audited financial statements for 2021 show that profit for the year plummeted to €192 million from €1.643 billion in 2020 as its balance sheet increased by €111 billion to €680 billion.

“The €1,452 million decrease (in profit) compared to the previous year was mainly due to lower income from foreign reserve assets and from securities held for monetary policy purposes, as well as a transfer to the provision for financial risks,” said the ECB.

“The Governing Council decided to transfer €610 million to the provision for financial risks in response to higher risk exposure stemming mainly from the continued purchases of monetary policy securities.”

The increase in the ECB balance sheet was mainly due to securities purchased under the Pandemic Emergency Purchase Programme (PEPP) and the asset purchase programme (APP).

At the end of 2021, the size of the consolidated balance sheet of the Eurosystem, which comprises assets and liabilities of the euro area national central banks (NCBs) and of the ECB vis-à-vis third parties, stood at €8.566 trillion, up from €6.978 trillion in 2020.

The ECB said the growth compared to the previous year was mainly due to securities purchased under the PEPP and the APP “and the increase in Eurosystem refinancing operations as a result of the third series of targeted longer-term refinancing operations (TLTRO III).”

Net interest income totalled €1.566 billion in 2021, down from €2.017 billion.

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.