FRANKFURT (MNI) – The European Central Bank’s net profit rose to
E2.25 billion in 2009 from E1.322 billion in 2008, the ECB said in its
annual report, published today.

The increase was driven by the release of E30 million from
provisions that had been set aside for risks associated with foreign
exchange rates, interest rates, credit and gold prices. The funds were
released “in order to comply with the maximum allowed ceiling,” the ECB
said.

In 2008, by contrast, this provision had subtracted E1.34 billion
from the ECB’s bottom line. The swing from 2008 to 2009 more than
accounted for the increase in the bank’s net profit.

“The total size of this provision, which is reviewed annually, now
amounts to E4.02 billion,” the ECB said.

Excluding the impact of provisioned funds, the ECB earned a surplus
of E2.22 billion in 2009, which was actually less than the E2.66 billion
it earned in 2008.

“The ECB’s net result for 2009…was distributed to the euro area
[national central banks] in proportion to their paid-up shares in the
ECB’s capital,” ECB President Jean-Claude Trichet said in the
introduction to the report.

The bank’s balance sheet showed that the value of gold and gold
receivables held by the ECB rose to E12,355 billion from 10,663 billion
on the back of rising gold prices.

The total amount of gold held by the central bank, on the other
hand, fell to 16,122,146 ounces of fine gold in 2009 from 17,156,546
held in 2008.

“The reduction was due to (a) sales of 1,141,248 ounces of fine
gold in accordance with the Central Bank Gold Agreement, which came into
effect on 27 September 2004 and of which the ECB is a signatory, and (b)
the transfer by Narodna banka Slovenska to the ECB of 106,848 ounces of
fine gold upon the adoption of the single currency by Slovakia,” the
report said.

The fall in the euro equivalent value of this holding following
those transactions was more than offset by a sharp rise in gold prices
in 2009, the central bank said.

–Frankfurt bureau; +49-69-720142; jtreeck@marketnews.com

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