ECB: Net profit up in 2012

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Frankfurt - The European Central Bank said Thursday that its net profit rose strongly last year, not least as a result of interest earned on its portfolio of sovereign bonds from crisis-ridden countries.

The ECB said in a statement its 2012 bottom-line net profit, after subtracting increased risk provisions, amounted to 998

million euros ($1.3 billion), up from 728 million euros a year earlier.

A substantial part of the profits came from interest income from its Securities Markets Programme or SMP Ä a controversial scheme for buying up the bonds of countries that are finding it difficult to drum up cash via the financial markets.

Overall, net interest income rose to 2.289 billion euros last year, up from 1.999 billion euros a year earlier.

Of that total, the ECB earned 1.108 billion euros from the SMP, including 555 million euros from the holdings of Greek sovereign debt, the central bank said.

The year before SMP income had amounted to 1.003 billion euros, of which 654 million euros came from the bank's holdings of Greek debt.

The central bank earns income on the investment of its foreign reserve assets, its own funds portfolio, interest income on its share of the total euro banknotes in circulation, and interest income arising from bond holdings.

The overall year-end surplus stood at 2.164 billion euros last year, up from 1.894 billion euros in 2011.

Of this, the ECB decided to set aside 1.166 billion euros in risk provisions, raising the total amount of risk provisions to the current ceiling of 7.529 billion euros, it said.

The ECB said it has already distributed 575 million euros of its net profit to the national central banks of the euro area, with the remaining 423 million euros to be transferred next week. - Sapa-AFP

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