In 2022, the central bank had registered a profit of 297 million euros.

In the report released today, the BdP reports having obtained a negative result before provisions and taxes (RAPI) of 1,054 million euros in 2023, as a result of reductions in the interest rate margin and a worse net result from the distribution of monetary income.

"With the materialization of the balance sheet structure risk, the Bank decided to use the provision for general risks to fully cover the RAPI, making the result before taxes (RAI) for 2023 null", it states.

Regarding the application of the 2023 results, the report points out that "the negative net result for the year 2023 of 109,678.37 euros, resulting from the recognition of the income tax estimate, will be transferred to carried-over results", according to an order from the Minister of State and Finance.

According to the central bank, "the materialization of the balance sheet structure risk created a mismatch between the remuneration of assets and the cost of liabilities", with the securities of the monetary policy programs presenting "fixed returns lower than those of short-term liabilities, which are remunerated at variable rates, mostly associated with monetary policy rates, generating a negative financial margin".

The "significant reduction in the net result from the distribution of monetary income" also contributed to the deterioration of the RAPI.

At the end of last year, the BdP's balance sheet amounted to almost 185,000 million euros, 13,000 million euros less than in 2022.

According to the central bank, "this evolution largely reflected the decrease in financing to credit institutions, with the maturity of a large part of the targeted longer-term refinancing operations (TLTRO III)".

It also resulted from the "reduction in securities held for monetary policy purposes, due to the end of the reinvestment of the maturity of securities from the Asset Purchase Program (APP)".

In 2023, the BdP's operating expenses totaled 197 million euros, with the central bank highlighting that, "despite the inflationary scenario, these expenses had a contained variation of +0.8%, continuing to reflect a policy of rationalization and containment of expenses".

Among the main items, personnel expenses fell from 130.7 to 125.1 million euros last year.

"Just as in recent years, monetary policy has positively influenced the Bank's balance sheet, its effect is now being felt in the opposite direction. As the monetary framework follows a normalization path in the medium term, the same is expected to happen with the results", says the BdP.

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