PARIS (Reuters) – The Banque de France (BDF) reported on an ordinary loss before the tax of 17.9 billion euros for 2024 on Wednesday, a record, partly covered by the mobilization of its available reserves.
In detail, 10.1 billion euros in losses will be covered by the fund for general risks, the net loss (7.7 billion euros) being assigned in postponement in order to be sold by future profits, details the institution in its annual activity report.
The losses have been dug compared to the previous year when they had reached 12.4 billion euros, but the movement should gradually be reversed, estimates the institution.
“The commitment we make is that our projections of results lead to additional losses limited in the coming years with regard to the results of 2023 and 2024,” said François Villeroy de Galhau, Governor of the BDF.
“Our projections is also a return to profits from the Banque de France by a limited number of year,” said the monetary policy manager.
The financial situation of the BDF, made up of its net capital and the latent capital gains on its assets, also remains solid at 202.7 billion euros, which rules out “having to solicit a recapitalization with the shareholder state”, notes the institution.
The increase in guiding rates since the summer of 2022 has led to a sharp decrease in monetary policy income which weighs on large central banks, the latter having to pay the surpluses of liquidity placed within them at higher rates, which the low yield of assets purchased during low rate period does not compensate.
The monetary relaxation started by the European Central Bank (ECB) and the maturity arrival of the assets purchased during the low rate period should ultimately reduce this asymmetry.
Last month, the ECB reported a record loss of 7.94 billion euros in 2024 and warned that new losses linked to its unconventional monetary policy programs were possible in the coming years.
(Written by Corentin Chappron with the contribution of Leigh Thomas, edited by Blandine Hénault)
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