ECB reports a loss of €1.3 billion for 2025

The European Central Bank (ECB) announced a loss of €1,254 million for 2025, compared to a loss of €7,944 million in 2024. The reduction is mainly due to a significant decrease in net interest expense.

The 2025 loss will remain on the ECB’s balance sheet to be offset against future profits. Consequently, there will be no profit distribution to euro area national central banks for 2025.

The losses since 2022 follow years of substantial profits and are a result of policy actions aimed at maintaining price stability. These policies involved expanding the ECB’s balance sheet through asset purchases, which increased liabilities with variable interest rates. Rising interest rates in 2022 and 2023 increased interest expenses, while income from securities purchased under the Asset Purchase Programme (APP) and Pandemic Emergency Purchase Programme (PEPP) did not increase proportionally.

Decreases in key interest rates since 2024 and the maturing of securities have reduced interest expenses, leading to lower net interest expenses in 2025. The ECB expects to return to profitability in 2026 or later, depending on future interest and exchange rates, as well as balance sheet composition.

Despite losses, the ECB’s financial strength remains solid, supported by capital and revaluation accounts totaling €71 billion at the end of 2025, up €12 billion from 2024.

Interest income and expenses in 2025 were as follows:

• Interest expenses decreased significantly from 2024, mainly due to lower interest on the ECB’s TARGET liability, with an average remuneration rate of 2.3% in 2025 compared to 4.1% in 2024.
• Interest income on claims related to euro banknotes in circulation and foreign reserves declined, partly due to lower interest income from US dollar-denominated securities.
• Exchange rate write-downs amounted to €1,316 million, mainly from depreciation of the Japanese yen, partially offset by exchange rate gains from rebalancing foreign reserves.

Total staff costs decreased to €809 million from €844 million, mainly due to lower expenses related to post-employment benefits. Operating expenses fell slightly to €619 million from €626 million.

Supervisory fee income increased marginally to €690 million from €681 million.

The ECB’s balance sheet shrank by €37 billion to €603 billion, mainly due to the decline in APP and PEPP holdings from redemptions.

The Eurosystem’s total balance sheet at the end of 2025 was €6,293 billion, down from €6,421 billion in 2024. The decrease was driven by reductions in securities holdings, partially offset by an increase in gold holdings to €1,274 billion, reflecting a rise in gold prices in euro terms.

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