The Banking Council has today approved the Bank of Finland’s financial statements and decided, on the proposal of the Bank of Finland’s Executive Board, that the bank will pay EUR 100 million to the state last year.
The corresponding revenue in the previous year was 188 million.
The Bank of Finland’s audited result for last year is EUR 142 million. According to the Bank of Finland Act, half of the profit is used to increase the reserve fund and the rest is transferred to the state.
The Executive Board estimates that the Bank of Finland’s solvency is sufficient to cover the risks arising from the performance of the Bank’s tasks. On these grounds, as in previous years, a larger share of the profits is distributed to the state than the general rule.
The Bank of Finland’s income consists mainly of interest income on banknotes and the Eurosystem, as well as investment income on foreign reserves and other own financial assets. Net interest income in 2020 is EUR 731 million, compared to EUR 755 million in the previous year.
According to the Bank of Finland’s press release, the decrease in net interest income was mainly due to expenses related to targeted monetary policy operations (TLTRO III) for the central bank. The interest rate on the operations is lower than the deposit rate of the ECB.
The Bank of Finland increased the general provision by EUR 100 million for risks arising from the conduct of central banking.
– Monetary policy operations during the interest rate pandemic have further increased the Bank of Finland’s balance sheet. The continued low level of interest rates and especially targeted financing operations with negative interest rates have reduced the Bank of Finland’s financial result. The earnings outlook for 2021 is also subdued, Deputy Chairman of the Board of the Bank of Finland Marja Nykänen said in a statement.
Source site www.is.fi