Central Bank posts €132m loss for last year as era of super profits ends

Slump into loss-making territory was foreseen for some time, says Minister for Finance Michael McGrath

The Central Bank slumped into a loss of €132.1 million last year, Minister for Finance Michael McGrath told Cabinet colleagues on Tuesday, as an era of super profits generated by the bank in the wake of the financial crisis came to an end.

This slump by the Central Bank into loss-making territory was foreseen for some time and it took a number of actions in recent years in response, Mr McGrath told other Ministers. A provision of €3 billion was built up to cover anticipated losses.

The Central Bank had generated more than €23.5 billion of profits in the 15 years to 2022, driven by the response of central bankers in Dublin and Frankfurt to the near-collapses of the domestic banking system and the euro, and a decade of anaemic inflation across the euro zone.

More than €18.5 billion was transferred to the Government over the period, cushioning the blow after taxpayers were forced to commit €64 billion to rescue the banking system and successive governments sought to narrow budget deficits.


The profits were initially driven by interest on emergency loans to banks during the financial crisis. They have also been fuelled by multibillion-euro gains on the sale of Government bonds used in 2013 to refinance the bailout of Irish Bank Resolution Corporation (IBRC), interest on bonds acquired under European Central Bank (ECB) quantitative easing (QE) programmes, as well as money made from charging commercial banks negative rates for excess deposits stored with the central bank.

The last of the IBRC-linked bonds were sold in 2023, while the Central Bank is now paying banks a 4 per cent interest rate on their surplus deposits, following a series of ECB rate hikes in the past two years in a fight against inflation.

Harry McGee

Harry McGee

Harry McGee is a Political Correspondent with The Irish Times

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times