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 be made for 2025.
The European Central Bank (ECB) announced a net loss of €1,254 million for 2025, compared to a loss of €7,944 million in 2024. The reduction is mainly due to a decrease in net interest expense. The loss will be carried forward and offset against future profits. Consequently, 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 attributed to policy measures 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. Interest expenses rose in 2022 and 2023 due to higher key interest rates, but decreased in 2024 and 2025 as rates declined and securities matured, reducing interest mismatches.
The ECB expects to return to profitability in 2026 or later, depending on future interest rates, foreign exchange rates, and balance sheet composition. Its financial strength remains solid, with capital and revaluation accounts totaling €71 billion at the end of 2025, up €12 billion from 2024.
In 2025, interest expenses decreased significantly, mainly due to lower interest on the TARGET liability, driven by a reduction in the average remuneration rate from 4.1% in 2024 to 2.3% in 2025. Interest income on securities remained stable, while exchange rate write-downs amounted to €1,316 million, mainly due to yen depreciation. Staff costs decreased to €809 million, and other operating expenses fell slightly to €619 million. Supervisory fee income increased marginally to €690 million.
The ECB’s balance sheet shrank by €37 billion to €603 billion, mainly due to redemptions of APP and PEPP holdings. The Eurosystem’s total assets and liabilities stood at €6,293 billion at the end of 2025, down from €6,421 billion in 2024, with securities holdings decreasing and gold holdings increasing to €1,274 billion due to rising gold prices.
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