World Economy

Irish CB to Profit $1.9b

Irish CB to Profit $1.9b
Irish CB to Profit $1.9b

The Irish Central Bank is to swell the coffers of the state by €1.7 billion ($1.9b) after achieving an unprecedented level of profitability last year.

Profits soared to €2.1b on the back of several factors stemming from the financial crisis as well as the manner in which the bank has conducted its business and the improved economic backdrop against which the results were achieved, according to its annual report published Friday, Irish Examiner online reported.

More than 80% of that profit will be paid to the exchequer in what constitutes a substantial windfall, in excess of expected levels.

The additional profits paid as a dividend to the department of finance give further scope for Finance Minister Michael Noonan to tinker with plans for the budget in October.

The Central Bank’s overall profits more than doubled from 2013, when it made €1.51b and paid €1.21b to the state.

In its report, the Central Bank also refused to bow to ECB pressure to quicken the sell-off of bonds which have caused serious financing concern in Europe.

As part of a deal struck with the ECB in 2013, the Central Bank saw the cost of bailing out the defunct Anglo Irish Bank stretched over a much longer period, by swapping €25b of long-term bonds for promissory notes. It agreed to drip-feed new bonds worth €25b into the market over time to allay fears about the deal.

Earlier this year, the ECB pressed in its annual report for that process to be fast-tracked. It said that “a more ambitious sales schedule… would further mitigate the persisting serious monetary financing concerns”.

The Irish Central Bank Friday said it would continue to sell the bonds at the current pace.