Financial statements of the ECB for 2016

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The FINANCIAL — The Governing Council of the European Central Bank (ECB) has approved the audited financial statements of the ECB for the year ending 31 December 2016.

The ECB’s net profit increased in 2016 by €111 million, to €1,193 million, mainly owing to higher net interest income earned on the asset purchase programme (APP) portfolio and the US dollar portfolio.

Net interest income totalled €1,648 million in 2016 (2015: €1,475 million). Net interest income arising from the APP increased by €275 million, to €435 million, as a result of the continuing securities purchases under this programme. Net interest income earned under the first two covered bond purchase programmes and the Securities Markets Programme (SMP) decreased, as a result of redemptions, to €88 million (2015: €120 million) and €520 million (2015: €609 million) respectively. Interest income on foreign reserve assets increased to €370 million (2015: €283 million) owing to higher interest income earned on the US dollar portfolio, according to ECB.

Realised gains arising from financial operations amounted to €225 million (2015: €214 million).

Write-downs amounted to €148 million (2015: €64 million). The increase in write-downs in 2016 was mainly due to the higher market yields of the securities held in the US dollar portfolio alongside the overall decrease in the market value of these securities. Based on the results of the impairment tests conducted for the securities held in the monetary policy portfolios, no impairment losses have been recorded.

The fees charged to supervised entities amounted to €382 million (2015: €277 million). These fees are charged in order to recover the ECB’s expenditure incurred in relation to its supervisory tasks. The SSM-related expenditure increased in 2016 owing to the increase in the total number of staff working in ECB Banking Supervision, the relocation to new premises and the provision of statistical and IT infrastructure.

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Total staff costs and other administrative expenses increased to €467 million (2015: €441 million) and €487 million (2015: €423 million) respectively owing to the increase in expenditure related to the ECB’s supervisory tasks.

The ECB’s net profit is distributed to the euro area national central banks (NCBs). The Governing Council decided to make an interim profit distribution, amounting to €966 million, to the euro area NCBs on 31 January 2017. At yesterday’s meeting the Governing Council decided to distribute the remainder of the profit, amounting to €227 million, on 17 February 2017.

The total size of the ECB’s Balance Sheet increased by 36% to €349 billion (2015: €257 billion). This increase was mainly due to the securities purchased under the APP. The appreciation of the foreign reserve assets held by the ECB also contributed to the increase.

These factors led to an increase in the consolidated balance sheet of the Eurosystem,[2] which rose by 32% to €3,663 billion (2015: €2,781 billion). The Eurosystem’s holdings of securities held for monetary policy purposes increased by €851 billion to €1,654 billion (2015: €803 billion) owing to securities purchased under the APP. On 31 December 2016 the APP holdings amounted to €1,532 billion (2015: €650 billion). Securities held under the SMP declined by €21 billion owing to redemptions.

 

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