ECB reports a loss of €1.3 billion for 2025

The European Central Bank (ECB) reported 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 decrease in net interest expense. The loss will be offset against future profits, and no profit distribution to euro area national central banks will occur for 2025.

The losses since 2022 follow years of substantial profits and result from policy measures aimed at maintaining price stability. These policies involved expanding the ECB’s balance sheet through asset purchases, which increased liabilities with variable interest rates. Rising interest rates in 2022 and 2023 increased interest expenses, while subsequent rate decreases in 2024 and 2025, along with maturing securities, reduced interest expenses.

The ECB expects to return to profit in 2026 or later, depending on future interest and exchange rates, and the size and composition of its balance sheet. Its financial strength remains solid, with capital and revaluation accounts totaling €71 billion at the end of 2025, up €12 billion from 2024.

Interest income and expenses in 2025 were as follows:

• Interest expenses decreased significantly from 2024, mainly due to lower interest on the ECB’s net TARGET liability, with an average remuneration rate of 2.3% in 2025 compared to 4.1% in 2024.
• Interest income on claims related to euro banknotes in circulation and foreign reserves declined, partly due to lower interest income from US dollar-denominated securities.
• Exchange rate write-downs amounted to €1,316 million, mainly from depreciation of the Japanese yen, partially offset by exchange rate gains from rebalancing foreign reserves.

Total staff costs decreased to €809 million from €844 million, mainly due to lower expenses related to post-employment benefits. Operating expenses slightly declined to €619 million from €626 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. The decline was driven by reductions in securities holdings, offset by an increase in gold holdings to €1,274 billion, reflecting market price increases.

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