The Parliamentary Supervisory Council has today confirmed the Bank of Finland’s financial statements for 2018. Upon proposal by the Board of the Bank of Finland, the Parliamentary Supervisory Council decided that EUR 143 million would be transferred to the State.
The Bank of Finland’s audited profit for the financial year 2018 totals EUR 230 million. According to the Act on the Bank of Finland, half of the Bank’s profit should be transferred to the reserve fund and the remaining profit made available for the use by 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 the undertaking of its tasks. As in previous years, and on the basis of these considerations, a share of the profit for 2018 exceeding the statutory 50% will be made available to the State.
The Bank of Finland’s income consists primarily of interest income on banknotes and the Eurosystem’s monetary policy items as well as investment income on foreign reserves and other financial assets of the Bank. In 2018, net interest income amounted to EUR 697 million (2017: EUR 567 million). Net purchases under the monetary policy asset purchase programmes continued until the end of 2018, and liquidity in the banking system increased. Net interest income was mainly boosted by commercial banks’ deposits with the Bank of Finland, for which the banks are charged a negative interest rate. Foreign currency-denominated interest income pushed up interest income on financial assets, while euro-denominated interest income was down on the previous year.
‘Growth in the Bank of Finland balance sheet slowed during 2018 as the Governing Council of the ECB reduced its monthly net purchases under the monetary policy purchase programmes. Nevertheless, the purchase programmes still increased the Bank’s exposures,’ stated Marja Nykänen, Deputy Governor of the Bank of Finland. A general provision totalling EUR 50 million was made against risks arising from the conduct of central banking activities.
The Bank of Finland’s income covers its operating expenses and provisions. Operating expenses net of banknote production services and an additional pension fund contribution amounted to EUR 97 million (2017: EUR 90 million).
The Bank of Finland’s financial statements, which also include the income and expenses of the Financial Supervisory Authority, have been published today on 15 March 2019 on the Bank’s website.
For further information, please contact:
Marja Nykänen, Deputy Governor of the Bank of Finland, tel. +358 9 183 2007.