European Central Bank profit falls in 2020 on lower interest income

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FRANKFURT, Feb. 18 (Xinhua) — The European Central Bank (ECB) said on Thursday that its annual profit fell in 2020 after several years of increases, citing reasons including lower interest income from its U.S. dollar portfolio.

According to its newly published annual accounts, the ECB’s profit fell to 1.643 billion euros (1.98 billion U.S. dollars) last year from 2.366 billion euros in 2019, due to lower net interest income.

The ECB posted a net interest income of 2.017 billion euros in 2020, a drop of 669 million euros from the previous year, mainly as a result of lower interest income earned on securities denominated in U.S. dollars, it said in a statement.

The U.S. dollar assets accounted for about 76 percent of the ECB’s total foreign currency holdings at the end of 2020.

Apart from lower yields on foreign assets, net interest income earned on securities held for monetary policy purposes also declined, which amounted to 1.337 billion euros in 2020, 110 million euros lower than in 2019, it added.

Last year, the ECB’s total assets expanded by 112.2 billion euros to 569.3 billion euros, mainly owing to securities purchases under the new pandemic emergency purchase program (PEPP) and the regular asset purchase program, according to the statement.

The ECB first rolled out PEPP in March last year to counter the possible economic fallout amid the pandemic and expanded the program twice in the following months.

The PEPP now stood at a record 1.85 trillion euros and the central bank promised to continue bond-buying under the PEPP until at least the end of March 2022, or once it judges that the pandemic crisis phase is over. (1 euro = 1.21 U.S. dollars) Enditem

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