Central Bank of Estonia confirms profit distribution strategy capped at 25% and targets higher capital levels

The Supervisory Board of the Central Bank of Estonia confirmed its standing approach to profit distribution, under which the state may receive between 0% and 25% of the central bank’s profit from the previous year. The Board also set a strategic objective to lift the relative level of the central bank’s capital toward the euro area central bank average. Under the strategy, capital is to be strengthened with reference to Eurosystem-wide risk considerations used in joint monetary policy decisions, and the Board noted that the Central Bank of Estonia’s ratio of increased capital to monetary-policy risk assets is among the lowest in the euro area. Since 1992, the central bank has allocated a total of EUR 192 million to the state budget. The Board also approved amendments to the statutes of the Estonian Fiscal Council to align them with changes to the State Budget Act adopted by parliament at the end of last year. The Supervisory Board will begin discussions on the distribution of the central bank’s 2025 profit at its meeting on 24 March, and it reviewed preparatory work for a report on economy financing due for publication on 27 February.