The European Central Bank reported a €1.3 billion loss for 2025, significantly lower than 2024, with losses offset against future profits. No profit distribution to euro area central banks will occur for 2025.
The European Central Bank (ECB) announced a loss of €1,254 million for 2025, compared to a loss of €7,944 million in 2024. The reduction is mainly due to a significant decrease in net interest expense.
The 2025 loss will remain on the ECB’s balance sheet to be offset against future profits. As a result, there will be no profit distribution to euro area national central banks for 2025.
The losses since 2022 follow years of substantial profits and are due to policy actions aimed at maintaining price stability. These policies involved expanding the ECB’s balance sheet through asset purchases, which increased liabilities on which interest is paid at variable rates. The rise in key ECB interest rates in 2022 and 2023 increased interest expenses, while income from securities purchased under the Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) did not increase proportionally.
Since 2024, decreases in interest rates and maturing securities have reduced the interest mismatch, significantly lowering net interest expenses in 2025. The ECB expects to return to profit in 2026 or later, depending on future interest rates, exchange rates, and balance sheet composition.
The ECB’s financial strength remains robust, with capital and revaluation accounts totaling €71 billion at the end of 2025, €12 billion higher than in 2024.
Interest income and expenses in 2025:
Exchange rate write-downs amounted to €1,316 million, mainly from depreciation of the Japanese yen, partially offset by gains from rebalancing foreign reserves.
Total staff costs decreased to €809 million from €844 million in 2024, mainly due to lower expenses related to post-employment benefits. Operating expenses fell slightly to €619 million.
Supervisory fee income was €690 million, up from €681 million in 2024.
The ECB’s balance sheet decreased by €37 billion to €603 billion, mainly due to reductions in APP and PEPP holdings from redemptions.
The Eurosystem’s total balance sheet at the end of 2025 was €6,293 billion, down from €6,421 billion in 2024, primarily due to declines in securities holdings, partially offset by an increase in gold holdings to €1,274 billion.
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