Central Bank: Bundesbank makes loss for the first time since 1979

Last year, the Bundesbank made a loss for the first time since 1979. The balance sheet shows a loss of around 19.2 billion euros. This is the highest loss in the history of the Deutsche Bundesbank, the central bank announced.

This means that the federal budget will once again miss out on a windfall - as it did in the previous four years. For years, the Federal Ministry of Finance had budgeted for a Bundesbank profit of 2.5 billion euros in the federal budget. In 2019, the then Finance Minister Olaf Scholz (SPD) was still able to celebrate the Bundesbank's highest profit since the financial crisis: 5.85 billion euros. The last balance sheet loss was 45 years ago: in 1979, the Bundesbank reported a deficit of just over 2.9 billion euros.

The burden of the rapid interest rate turnaround had already almost consumed the Bundesbank's billions in provisions by 2023. For 2024, the Bundesbank therefore only had 0.7 billion euros in reserves to cushion losses. Although the interest result improved slightly, it was still significantly in the red at around 13.1 billion euros (previous year: 13.9 billion euros). Red figures are also likely for the coming years, even if the Bundesbank estimates that the losses will be lower than in 2024.

Starting in the summer of 2022, the European Central Bank ( ECB ) rapidly increased interest rates in the euro area in order to get high inflation under control. Inflation is now far from record levels, so the ECB has lowered key interest rates in the euro area again. Higher interest rates on the financial markets led to rising interest expenses on the part of the central banks, which interest income did not keep pace with. At the same time, many long-term securities such as government and corporate bonds, which the euro central banks bought on a large scale for years as part of the common monetary policy, yield comparatively low interest rates.

The ECB itself reported its second consecutive year of losses for 2024 and the highest loss in its more than 25-year history: a good 7.9 billion euros. The ECB's usual profit distribution - including to the Bundesbank - was thus canceled again.

Bundesbank Vice President Sabine Mauderer emphasized the solidity of the Bundesbank's balance sheet: "The Bundesbank can bear both the current and the expected financial burdens." For example, the Bundesbank's gold reserves have become significantly more valuable due to the increased price of the precious metal. The Bundesbank's total reserves of gold and foreign currencies were valued at just over 267 billion euros at the end of last year - up from just over 197 billion euros a year earlier.

The main goal of central banks is not to make profits. The ECB and with it the national central banks in the Eurosystem are primarily intended to ensure stable prices and thus a stable currency in the currency area of ​​the 20 states.