Bundesbank posts $20.8B loss in 2024 due to high interest payments

ISTANBUL

Germany’s Bundesbank posted €19.8 billion ($20.79 billion) in 2024 due to high net interest income loss, the bank said in its annual report released Tuesday.

The bank’s loss decreased 8.3% last year compared to 2023’s €21.6 billion.

Loss from interest payments reached €13.1 billion last year, down 0.8% from the previous year’s €13.9 billion.

The loss came due to the low income from the bonds it purchased during the period when interest rates were low and the increase in interest payments to banks.

“The Bundesbank has a sound balance sheet,” Bundesbank’s President Joachim Nagel said, explaining that the value of its revaluation reserves, especially for gold, was many times greater than the current and prospective accumulated losses.

Nagel stated that if inflation returns to the European Central Bank’s (ECB) 2% objective this year, the ECB may be able to lower interest rates even more.

“We anticipate that Germany will see a sustainable return to a level of 2% in 2026,” he added.

Central banks in the eurozone pay deposit interest on deposits they receive from commercial banks. While this rate was 4% until June 2024, it is currently at 2.75% with the ECB’s interest rate cuts.

• Bundesbank
• Economy
• Germany
• Interest Rate
• Joachim Nagel
• Loos