The Parliamentary Supervisory Council has confirmed the Bank of Finland's financial statements for 2015. Upon a proposal of the Board of the Bank, the Parliamentary Supervisory Council decided on the transfer of EUR 98 million to the State. Last year, the Bank transferred EUR 137.5 million to the State. "In 2015 the ECB Governing Council reinforced its accommodative monetary policy by extending its securities purchases to government bonds and linking the purchases to forward guidance. Purchases will be continued until inflation is sustainably on a path to the objective of price stability. Key interest rates will remain very low for an extended period of time. The low interest rates have an effect on the central bank’s financial results", stated Bank of Finland Governor Erkki Liikanen.
The Bank of Finland's profit after provisions totalled EUR 146 million (2014: EUR 150 million). The Bank increased its general provision and provision against real value loss by EUR 100 million (2014: EUR 175 million). These provisions ensure the Bank's ability to carry out its tasks under all circumstances and serve as a buffer against exchange rate, interest rate and credit risks. Total provisions against risks amounted to EUR 3.7 billion (2014: EUR 3.5 billion). "Adequate risk buffers reinforce the Bank of Finland’s capacity to carry out its central banking tasks even in changing financial market conditions. At the same time, they enable the bank to maintain its policy of steady profit distribution even in the future", stressed Deputy Governor Pentti Hakkarainen. In total, EUR 2.6 billion has been transferred to the state from the start of 2000.
The Bank of Finland's income primarily consists of interest income on banknotes and monetary policy items as well as investment income on foreign reserves and other financial assets of the Bank. In 2015, the net interest income amounted to EUR 310 million (2014: EUR 317 million). Interest income declined due to the low level of interest rates and the maturing of securities purchased under the securities market programme (SMP). The expanded asset purchase programme (EAPP) launched in 2015 was implemented as planned and the purchases increased the Bank's balance sheet by about EUR 9.2 billion. The purchase programme increased the excess liquidity in the euro area banking system, which in 2015 also was reflected in an increase in deposits made by commercial banks with the Bank of Finland.
The Bank of Finland’s operating expenses and provisions are covered by its income. Operating expenses net of banknote procurements and extraordinary repayment of pension fund contributions amounted to EUR 88 million (2014: EUR 89 million). Operating expenses and other income also include the Financial Supervisory Authority's (FIN-FSA) expenses and supervision fee income. Staff costs included in the operating expenses totalled EUR 49.4 million, of which the Bank's share was EUR 32.8 million (2014: EUR 33.6 million) and FIN-FSA's share EUR 16.6 million (2014: EUR 16.8 million).
According to the Act on the Bank of Finland, half of the Bank's profit is to be transferred to the reserve fund and the remaining profit made available for use in accordance with the needs of the State. However, the law allows for an exceptional profit distribution if justified by the Bank's financial condition or the size of the reserve fund.
In its profit distribution proposal, the Bank of Finland Board assessed that the Bank's capital adequacy is sufficient to cover the risks related to undertaking its statutory tasks. As in the previous year, and on the basis of these considerations, a share of the profit for 2015 exceeding the statutory 50% will be made available to the State.
The Bank of Finland's financial statements and related notes have been published today on 21 March 2016 as part of the Bank's Annual Report.
For further information, please contact Pentti Hakkarainen, Deputy Governor of the Bank of Finland, tel. +358 10 831 2002.