The Annual Accounts approved by the European Central Bank (ECB) for 2011 shows that the Governing Council decided to transfer an amount of €1,166 million to the risk provision, which increased the risk provision to the level of its present ceiling of €6,363 million. As a result of the transfer to the risk provision, the ECB’s net profit for 2011 was €728 million in comparison with the €171 million of 2010.

According to the audited Annual Accounts of the ECB for the year ending 31 December 2011, now approved by its Governing Council, the ECB earned a surplus of €1,894 million in 2011, compared with a surplus of €1,334 million in 2010. €1,166 million were transferred to the risk provision and that amount, together with the amount of €13 million contributed by Eesti Pank in accordance with Article 48.2 of the Statute of the ESCB, increased the risk provision to the level of its present ceiling of €6,363 million. The purpose of the risk provision is to cover foreign exchange rate, interest rate, credit and gold price risks, which are monitored on an on-going basis.

The audit also shows that, part of the income earned on the ECB’s share of total euro banknotes in circulation, amounting to €652 million, was distributed to the euro area national central banks (NCBs) on 3 January 2012. Moreover, the Governing Council has now decided to distribute the remaining €76 million to the euro area NCBs on 12 March 2012.

The ECB’s regular income derives mainly from investment earnings on its foreign reserve assets and its own funds portfolio, from interest income on its 8% share of the total euro banknotes in circulation, and from net interest income arising from securities purchased for monetary policy purposes under the first and second covered bond purchase programmes (the first programme operated from July 2009 to June 2010 and the second started in November 2011) and the Securities Markets Programme (which started in May 2010). On the other hand, the accounts also show that the ECB’s administrative expenses for staff, rental of premises, professional fees, and other goods and services amounted to €442 million in 2011 while in 2010 were €415 million, including depreciation charges on fixed assets amounting to €11 million.