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Laying out its annual accounts for 2014 on
Thursday, the ECB said the jump in wages and costs and the
squeeze on its income from its record low interest rates meant
profits dropped by almost a third, to 989 million euros ($1.13
billion) from 1,440 million euros.
The bank's hiring drive as it prepared to become the euro zone
banking supervisor late last year saw wages and other staff
costs jump by a quarter to 301 million euros from 241 million
last year.
Other administrative costs, linked to renting extra offices for
the roughly 1000 supervisory staff it plans to have, as well as
other services to run its operations climbed by over 30 percent.
These costs will mostly be clawed back from banks.
The ECB will distribute the year's profits to the 18 euro zone
national central banks that were part of ECB -- Lithuania joined
at the start of this year -- in two chunks. An initial 841
million was transferred on Jan. 30 with the remaining 148
million to be handed over on Feb. 20.
The bank also saw profits from the Italian, Spanish, Greek,
Irish and Portuguese government bonds that it bought under it
SMP crisis program drop to 728 million euros from 962 million in
2013 as the bonds expired.
This year, however, it will kick-off a new plan that is expected
to see it buy roughly 1 trillion euros worth of government bonds
from across the bloc.
(Reporting by Marc Jones; editing by John O'Donnell)
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