Bundesbank posts €4.1 billion profit in 2009

The Deutsche Bundesbank posted a profit of €4.1 billion in 2009, compared with €6.3 billion in 2008. The distributable profit, pursuant to section 27 number 2 of the Bundesbank Act, was paid over in full to the Federal Government on 9 March 2010.

“The year-on-year decline in the profit figure is attributable mainly to lower interest income in euro. The reason for this was that the key rates in the euro area were at an all-time low,” explained Bundesbank President, Professor Axel Weber.

Professor Weber took a cautiously optimistic view of the outlook for the global economy. “The recovery in the world economy is gaining in strength, even though there are still marked differences between economic regions in terms of its scale and speed.” For German exporters, this development is being accompanied by stronger demand stimuli, especially from countries outside the euro area, he said. “Taking the various factors into account,” he continued, “I firmly believe that the recovery process which began in the third quarter of 2009 is essentially intact and that it will continue despite the slower pace of growth in the final quarter of last year and the first quarter of 2010. An additional factor in this context is that the German labour market continues to be in extremely robust shape.” Given the fairly subdued nature of the recovery by historical standards and considerable capacity overhangs, the general price level will also go up only very moderately, Professor Weber added.

The outlook in the financial markets improved during the course of 2009, stated Bundesbank Executive Board member, Dr Hans Georg Fabritius.  The credit institutions’ need for exceptionally deep liquidity buffers had declined in the wake of decreasing uncertainty, he said. “As a result, the Bundesbank’s balance sheet total contracted by €25 billion to €588 billion,” he added. “Without the countervailing effects of the revaluation of gold and foreign currency (+€14 billion) and the allocation of special drawing rights (+€12 billion), the balance sheet total would have declined by 8%.”
The most important source of the Bundesbank's profit was interest income of €7.6 billion (2008: €16.9 billion), €6.6 billion of which was denominated in euro (2008: €15.4 billion). This was partly offset by interest expense of €3.5 billion (2008: €8.5 billion), resulting in net interest income of €4.2 billion (2008: €8.4 billion). The realised gains arising from financial operations were another source of income, amounting to €0.7 billion net (2008:€0.6 billion), as was income from participating interests of €0.6 billion (2008: €0.4 billion).

Balance sheet items which are subject to market price fluctuations are valued at market prices. Valuation gains arising from this are not recognised in the profit and loss account but are shown, instead, under the balance sheet liability item “Revaluation accounts”. The valuation gains amounted to €76.8 billion (gold €75.9 billion, foreign currency €0.6 billion, and securities €0.3 billion).

Further information appears in the Bundesbank’s Annual Report for 2009, which is being published on our website (www.bundesbank.de) in German at 2 pm (CET) today and in English shortly.