European Central Bank reports a EUR 7.9 billion loss for 2024 and no profit distribution to euro area national central banks

The European Central Bank published its 2024 financial statements showing a loss of EUR 7,944 million, which will remain on its balance sheet to be offset against future profits, resulting in no profit distribution to euro area national central banks for 2024. The result compares with a EUR 7,886 million loss in 2023 before a full release of the provision for financial risks reduced the reported 2023 loss to EUR 1,266 million, while the provision’s balance was zero in 2024. The loss was primarily driven by higher interest expenses on liabilities remunerated at variable rates, while income on largely fixed-rate, longer-maturity assets purchased under the asset purchase programme and pandemic emergency purchase programme adjusted more slowly. Net interest income remained negative at EUR -6,983 million, with significant interest expense on the ECB’s net TARGET liability, which was remunerated at the main refinancing operations rate and rose on a higher average rate of 4.1% in 2024 (3.8% in 2023). Write-downs increased to EUR 269 million, staff costs rose to EUR 844 million mainly due to changes to pension plan rules, and other administrative expenses increased to EUR 626 million, while supervisory fee income was EUR 681 million; the ECB balance sheet decreased by EUR 33 billion to EUR 641 billion. The ECB indicated it may still incur losses in coming years, though expected to be lower than in 2023 and 2024, and noted that its capital and revaluation accounts totalled EUR 59 billion at end-2024. Separately, it reiterated that from 1 January 2025 the deposit facility rate becomes the basis for remuneration of certain intra-Eurosystem positions including TARGET balances, and that the final annual consolidated balance sheet of the Eurosystem will be published in June.