The European Central Bank (ECB) reported on Thursday that it closed the year 2025 with a loss, but significantly smaller than in 2024, with almost balanced interest expenses and income.
The ECB’s loss amounted to 1.3 billion euros in 2025, the report shows. In 2024, the loss amounted to approximately 7.94 billion euros, and in 2023 it was only slightly lower, but the bank lowered it to 1.27 billion euros, fully exhausting the provisions for financial risk.
The bank recorded a loss of 1.6 billion euros in 2022 as well, but covered it with provisions, so the result was a positive zero. The significantly smaller loss in 2025 primarily reflects significantly lower net interest costs.
Last year, interest expenses exceeded interest income by only 178 million euros. In 2024, the difference amounted to almost seven billion euros.
The disparity between interest income on assets and interest expenses on liabilities “has eased considerably”, they point out in the report, as reported by Financije hr.
The bank has lowered key interest rates since 2024, and its obligations have been continuously reduced, considering the maturity of securities in programs to stimulate economic growth and inflation before 2021 and to mitigate the consequences of the corona crisis.
The bank also reported that it had written off 1.3 billion euros in exchange differences, primarily due to the weakening of the Japanese yen, which resulted in a decline in the market value of related assets in the ECB’s portfolio. In 2024, that item showed a write-off of 81 million euros.
The ECB’s operations should return to the positive this year or next, they expect, noting that this will depend on the level of interest rates and exchange rate differences, but also on the size and composition of the ECB’s balance sheet. The bank will book this year’s loss in the balance sheet and cover it with a profit in future operations, they add.
