Overview
- The ECB reported a €1.254 billion loss for 2025, a marked improvement from the €7.944 billion deficit in 2024.
- Profit distributions to national central banks are suspended again as losses are carried forward, bringing the cumulative shortfall to about €10.5 billion.
- Losses stem from higher interest paid on liabilities since 2022 versus low returns on long‑dated bond holdings, with Target payment‑system balances contributing to costs.
- Lower policy rates, a shrinking bond portfolio and a change to remunerate Target balances at the deposit rate helped reduce net interest expenses in 2025.
- Despite operating losses, net equity rose by €11 billion to €60.9 billion due to gold valuation gains, and the Bundesbank has signaled further loss years after a roughly €19.2 billion 2024 deficit.