EURUSD European Companies Struggle
The European Central Bank said Thursday that its net profit declined in 2014, due to lower interest income and higher operating expenses related to its new role as banking supervisor.
The ECB said in a statement its 2014 bottom-line net profit, after subtracting risk provisions, amounted to 989 million euros, down from 1.44 billion euros a year earlier.
“The decrease was mainly due to low interest income on banknotes; a decrease in net interest income from the Securities Markets Programme (SMP) owing to redemptions; higher operating expenses,” the statement said.
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.
Overall, total net interest income fell to 1.536 billion euros in 2014 from 2.005 billion euros in 2013, the ECB said.
We have some big trades lined up for this week so join us in the Live Trading Room, Trade Sukuks, Treasuries, FX, Equities and Options with the World’s Leading Platform Open an account here , call us at 312 219 1354, or email us to get started.
Join the Live Trading Room
A substantial part of the interest income is made up of earnings from its SMP programme — a controversial scheme for buying up the bonds of countries that are finding it difficult to drum up cash via the financial markets.
But net interest income from the SMP was down at 728 million euros in 2014 from 962 million euros the previous year, as substantial amounts of those bond holdings are paid back.
Interest income on banknotes fell to 126 million euros last year from 406 million euros in 2013.
– Sole banking supervisor –
The ECB said it decided to set aside just 15 million euros in risk provisions, up from 0.4 million euros a year earlier.
Staff costs rose to 301 million euros from 241 million euros as staff numbers increased during the course of the year owing to the preparations for the launch of the Single Supervisory Mechanism or SSM.
The ECB took over as the eurozone’s sole banking supervisor in November.
Other administrative expenses — including rent, professional fees and others goods and services — increased to 376 million euros from 287 million euros.
The ECB said it would distribute all of the net profit of 989 million euros to the national central banks of the euro area.
It has already distributed 841 billion euros of the total, with the remaining 148 million euros to be transferred on Friday.
The ECB said its total balance sheet declined slightly at the end of last year, amounting to 2.208 trillion euros as of December 31, compared with 2.273 trillion euros a year earlier.
In a bid to ward off deflation in the 19 countries that share the euro, the ECB has said it aims to expand its balance sheet by around 1.0 trillion euros in order to boost the amount of liquidity in the eurozone financial system.
In order to achieve this, the ECB unveiled a programme of so-called “quantitative easing” or QE in the coming months, under which it plans to buy around 1.14 trillion euros of bonds.
Latest posts by Shayne Heffernan (see all)
- Malaysia’s Prime Minister: Corruption Evidence Mounts - August 29, 2015
- China’s Currency War Hits South East Asia - August 29, 2015
- Thailand Travel Outlook - August 29, 2015
- Travel News: Democratic Republic of Congo - August 29, 2015
- India and Pakistan at War in Kashmir - August 29, 2015
Trade FX, Equities and Options with the World's Leading Platform Open an account here , call us at 305 4904 116, or email us to get started.
US Major Markets: Support And Resistance $SPY, $DIA, $QQQ The ... read more
Forex Technical Analysis For: EUR/USD $EURUSD Euro The EUR/USD tried ... read more
Gold Futures Gain On Speculation Of More Stimulus From US ... read more