Germany's Bundesbank is faced with a record loss of € 19.2 billion

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The Germany National Bank has reported record losses of € 19.2 billion, which has marked its first deficit since 1979.

In his latest figures for 2024, published On February 25, the Bundesbank predicted that it would not make a profit in the next few years, although the losses are likely to be smaller.

“The high point of the annual burdens is probably adopted,” said the President of the Bundesbank, Joachim Nagel, when presenting the annual annual financial statements in Frankfurt.

The news deleted every wind case for the German federal budget and marked the fifth year in a row without distribution of profits by the lender.

Nagel had warned a year ago and explained: “We assume that we are not able to distribute profits for a long time.”

In 2023, the Bundesbank almost changed a loss by immersing it in billions in provisions, but these buffers were now almost exhausted.

For 2024 there were only 0.7 billion euros reserves to cut off the blow. The bank said that it had planned to compensate for the losses with future profits, although this looked for many a somewhat distant view.

The Bundesbank's gold reserves have supported a certain optimism and have increased by rising precious metal prices.

At the end of 2024, his gold and external currency stocks at 267 billion euros had a value of € 197 billion in the previous year.

The Bundesbank Vice President Sabine Mauderer emphasized that she was the strength of the bank's balance: “The Bundesbank can bear both the current and the expected financial burden.

“This shows that the Bundesbank is also able to fully perform its tasks in the event of a accumulated loss,” she said.

Mauderer came to the conclusion: “The Bundesbank's balance sheet is solid.”

The national lender in Germany has been struggling since the interest rate increases of the European Central Bank (ECB) from the summer of 2022, a reaction to inflation that has been out of control.

These measures worked – inflation in the euro zone has withdrawn from its tips since then, which caused the ECB to facilitate the interest again.

But the damage to the central bank's finances lingered; Like its ECB parent, the Bundesbank contains huge portfolios of ties, which are locked up in low returns from the era of quantitative loosening, a legacy that now speaks together with the high interest rate.

The ECB did not go much better and reported its own historical loss of 7.9 billion euros in the worst in its 25th anniversary in 2024.

The Fallout was difficult for the Bundesbank. Higher market interest rates have increased its payment obligations, while the earnings from long-term securities with low increase, as in years of ECB monetary loosening, were no longer maintained, step and corporate bonds.

Net interest income, although they improved slightly in 2023, remained deep in the red at € 13.1 billion last year, compared to € 13.9 billion in the previous year.

In Berlin, the loss stabs twice hard. The Ministry of Finance had long had a steady annual profit of 2.5 billion euros from the Bundesbank.

In 2019, the then finance minister Olaf Scholz enjoyed a weight of 5.85 billion euros, the highest since the financial crisis.

The record losses mean fewer reserves or buffers to survive future financial storms.

For 2025, Germany was expected to face a third year in a row in a row, while it promised to keep Ukraine up to date and to rebuild its military after decades.

News.az