ECB Posts Higher Profit on Lower Transfers to Risk Provisions

The European Central Bank posted a net profit of 1.44 billion euros ($2 billion) for 2013, up from 995 million euros in 2012.

The Frankfurt-based ECB distributed 1.37 billion euros to national central banks in the euro region on Jan. 31 and will transfer another 61 million euros tomorrow, its annual accounts showed today. The ECB increased its risk provisions by just 400,000 euros, taking the total to its ceiling of 7.53 billion euros, the institution said in an e-mailed statement.

“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,” President Mario Draghi said in the statement.

Net interest income totaled 2 billion euros in 2013 after 2.29 billion euros in 2012, the ECB said. It included 962 million euros in interest from the bonds purchased under the now-terminated Securities Markets Program, of which 437 million euros arose from the ECB’s holding of Greek securities.

That sum is only part of the interest earned on Greek bonds held by all euro-area central banks under the SMP. Governments agreed to return to Greece an amount equivalent to the interest earned on Greek bonds in the SMP as part of a second bailout package negotiated in 2012.

The average remaining maturity of the bonds in the SMP is 3.9 years, the ECB said.

To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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