Annual accounts of The European Central Bank for the year ending 31 December 2011

Frankfurt am Main, (PresseBox) - The Governing Council of the European Central Bank (ECB) today approved the audited Annual Accounts of the ECB for the year ending 31 December 2011.

The ECB earned a surplus of €1,894 million in 2011, compared with a surplus of €1,334 million in 2010. The Governing Council decided to transfer, as at 31 December 2011 an amount of €1,166 million to the risk provision, which - together with the amount of €13 million contributed by Eesti Pank in accordance with Article 48.2 of the Statute of the ESCB - increased the risk provision to the level of its present ceiling of €6,363 million. The purpose of the risk provision is to cover foreign exchange rate, interest rate, credit and gold price risks, which are monitored on an on-going basis. The size of and the continuing requirement for this provision are reviewed annually.

As a result of the transfer to the risk provision, the ECB's net profit for 2011 was €728 million (2010: €171 million). Following a decision by the Governing Council, part of the income earned on the ECB's share of total euro banknotes in circulation, amounting to €652 million, was distributed to the euro area national central banks (NCBs) on 3 January 2012. The Governing Council decided at today's meeting to distribute the remaining €76 million to the euro area NCBs on 12 March 2012.

The ECB's regular income derives mainly from investment earnings on its foreign reserve assets and its own funds portfolio, from interest income on its 8% share of the total euro banknotes in circulation, and from net interest income arising from securities purchased for monetary policy purposes under the first and second covered bond purchase programmes (the first programme operated from July 2009 to June 2010 and the second started in November 2011) and the Securities Markets Programme (which started in May 2010).

Net interest income totalled €1,999 million in 2011 (2010: €1,422 million). It included interest income of €856 million earned on the ECB's share of the total euro banknotes in circulation (2010: €654 million), net interest income of €166 million (2010: €140 million) arising from securities purchased under the covered bond purchase programmes and net interest income of €1,003 million (2010: €438 million) arising from securities purchased under the Securities Markets Programme. The ECB paid remuneration of €434 million (2010: €346 million) to the NCBs on their claims in respect of the foreign reserve assets transferred by them to the ECB, while interest income on foreign reserve assets amounted to €290 million (2010: €366 million).

Realised gains arising from financial operations amounted to €472 million (2010: €474 million). Higher net exchange rate gains on foreign currency outflows were offset by lower net realised price gains on sales of securities.

Write-downs, arising mainly from unrealised losses on marketable securities other than those held for monetary policy purposes, amounted to €157 million in 2011 (2010: €195 million).

The ECB's administrative expenses for staff, rental of premises, professional fees, and other goods and services amounted to €442 million in 2011 (2010: €415 million), including depreciation charges on fixed assets amounting to €11 million. The vast majority of the costs incurred in connection with the construction of the ECB's new premises have been capitalised and are excluded from this item.

The Annual Accounts, together with a management report for the year ending 31 December 2011, will be published in the ECB's Annual Report on 25 April 2012.

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