ECB says profits up in 2015

The European Central Bank said Thursday that its net profit increased in 2015, due to income the sale of securities and its ability to recover operating expenses related to its role as banking supervisor. The ECB said in a statement its 2015 bottom-line net profit amounted to 1.082 billion euros ($1.2 billion), up from 989 million euros a year earlier.
"Higher realised gains from the sale of securities in 2015 contributed to this increase," 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 1.475 billion euros in 2015 from 1.536 billion euros in 2014, the ECB said.
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 609 million euros in 2015 from 728 million euros the previous year, as substantial amounts of those bond holdings are paid back. Interest income on banknotes fell to 42 million euros last year from 126 million euros in 2014.
Realised gains from financial operations jumped to 214 million euros in 2015 from 57 million euros in 2014. Staff costs rose to 441 million euros from 301 million euros as staff numbers increased owing to the ECB's assumption of its supervisory tasks. The ECB took over as the eurozone's sole banking supervisor in November 2014. Other administrative expenses - including rent, professional fees and others goods and services - increased to 423 million euros from 376 million euros. The ECB said it would distribute all of the net profit of 1.082 billion euros to the national central banks of the euro area.
It has already distributed 812 million euros of the total, with the remaining 270 million euros to be transferred on Friday. The ECB said its total balance sheet expanded at the end of last year, amounting to 2.781 trillion euros as of December, compared with 2.208 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 has launched a programme of so-called "quantitative easing" or QE, under which it plans to buy around 60 billion euros of bonds every month until March 2017.