ECB turns a profit in 2013 on lower risk provisionThursday 20 February 2014 19.04
The European Central Bank said its net profit rose strongly last year, as it set aside much less in risk provisions and continued to earn income on Greek debt.
The ECB said in a statement its 2013 bottom-line net profit, after subtracting lower risk provisions, amounted to €1.44 billion, up from €995m a year earlier.
As in previous years, a substantial part of the ECB's profits came from interest income from its Securities Markets Programme or SMP - a controversial scheme for buying up the bonds of countries that are finding it difficult to drum up cash via the financial markets.
But the income from the SMP was down on the previous year.
Overall, net interest income fell to €2.005 billion last year from €2.289 billion a year earlier.
Of that total, the ECB earned €962m from the SMP, including €437m from the holdings of Greek sovereign debt, the central bank said.
The year before, SMP income had amounted to €1.108 billion euros, of which €555m came from the bank's holdings of Greek debt.
"The financial result for 2013 reflects the monetary policy stance as well as our commitment to an efficient use of resources and prudent financial management, at a time of increasing responsibilities and tasks entrusted to the ECB," said ECB President Mario Draghi.
The central bank earns income on the investment of its foreign reserve assets, its own funds portfolio, interest income on its share of the total euro banknotes in circulation, and interest income arising from bond holdings.
The ECB decided to set aside just €0.4 billion in risk provisions, down from €1.166 billion a year earlier.
It said it would distribute a total of €1.43 billion of its net profit to the national central banks of the euro area.
It has already distributed €1.37 billion of this to the banks, with the remaining €661m to be transferred tomorrow.