The Austrian Central Bank (OeNB) recorded investment losses of around EUR 1.9 billion in the 2022 financial year. The reasons for this were the effects of the interest rate turnaround initiated by the ECB in the summer of 2022 and the negative price developments on the markets in the previous year. Thanks to the release of a risk provision, the bottom line was still in the black. There is no distribution for the federal government this year. This is likely to remain the case in the years to come.
OeNB Governor Robert Holzmann explained in an interview in January that the policy of the European Central Bank (ECB) was decisive for business development in 2022. In the course of this, the OeNB has bought massive amounts of bonds in recent years. However, these papers now have low interest income and have lost significantly in value in the course of the interest rate turnaround.
“Losses can arise if commercial banks’ deposits with a central bank result in higher interest expenses than interest income can be generated from the fixed, but currently lower-interest assets of a central bank,” the OeNB explains in its broadcast on Thursday the so-called asset-liability mismatch .
In 2022, deposits from banks resulted in interest expenses of EUR 429 million, while interest income from securities for monetary policy purposes was only EUR 209 million. As a result, the OeNB posted negative net interest income of EUR 289 million for the first time.
In addition to the asset-liability mismatch, the weak previous year on the stock exchanges weighed on the OeNB’s own investments in bonds and shares. In total, there were write-downs on securities and foreign currencies in the previous year in the amount of EUR 1.349 billion and realized losses on security price differences of EUR 584 million. These losses might only be offset by releasing a risk provision of EUR 1.934 billion.
The bottom line is that the business result is zero. The federal government is therefore left empty-handed this year and does not receive any distribution. The OeNB also expects weaker business results for the coming years and assumes that accordingly no profit shares can be distributed to the Republic. For the 2021 financial year, the OeNB had assigned EUR 57 million plus EUR 24 million in the form of corporate income tax (KöSt) to the federal government.
Due to a lower volume in the longer-term refinancing operations (Targeted longer-term refinancing operations – TLTRO III), the SNB’s total assets fell in 2022 for the first time since 2014. It fell by 5 percent or EUR 14 billion to EUR 261 billion.
The TLTRO III were offered from autumn 2019 to December 2021 with a term of three years and were in high demand from banks in Austria. The first tranches were due in autumn 2022 and there was the possibility of early repayments, which was partially used, writes the OeNB. At the same time, from autumn 2022 there was a decline in deposits from banks on the liabilities side.
