The German central bank on Friday reported an annual distributable profit of zero, after it released 19.2 billion euros — the entirety of its provisions for general risks — and 2.4 billion euros from its reserves.
The ECB on Thursday posted its first annual loss since 2004, of 1.3 billion euros, even as it also drew on its own risk provisions of 6.6 billion euros, as higher interest rates hit central banks' securities holdings. Net interest income was negative for the first time in its 67-year history, declining by 17.9 billion euros year on year to -13.9 billion euros.
The German central bank — and many of its peers — have significant securities holdings exposed to interest rate risk, which have been significantly impacted by the European Central Bank's, of 1.3 billion euros, even as it also drew on its own risk provisions of 6.6 billion euros. It follows the euro zone central bank's near decade of financial stimulus, printing money and buying large amounts of government bonds to boost growth, which are now requiring hefty payouts.