The German Bundesbank published its 2025 annual accounts, reporting that its annual loss fell by more than half year on year to EUR 8.6 billion as the earnings position improved. It nevertheless expects to record another annual loss in 2026, while maintaining that it can fully perform its tasks despite an accumulated balance sheet loss. The accumulated balance sheet loss, combining loss carried forward and the 2025 result, stands at EUR 27.8 billion, but the Bundesbank highlighted high valuation reserves that rose to EUR 388 billion at end-2025. Net interest income improved by EUR 8.9 billion but remained negative at minus EUR 4.2 billion, with lower burdens attributed to declining bond holdings and lower policy rates. The balance sheet total decreased by EUR 24 billion to EUR 2,349 billion, as monetary policy bond holdings fell by EUR 122 billion, partly offset by a EUR 125 billion increase in the balance sheet value of the gold position to a record EUR 395 billion; net equity rose by EUR 112 billion to EUR 363 billion. The Bundesbank indicated that future annual surpluses would be used to reduce the accumulated balance sheet loss and rebuild risk provisions, and it expects the financial burdens to decline further in 2026 while remaining noticeable. In the same context, President Joachim Nagel noted that price stability had returned in the euro area in 2025 and that the European Central Bank’s Governing Council is focused on stabilising inflation sustainably at the 2% target in 2026, while remaining watchful given uncertainty including the volatile situation related to the military conflict in the Middle East.

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