Losses at the Central Bank last year increased six fold to €795m, according to the 2024 Central Bank’s annual report which shows that the losses of €795m follow losses of €132m for 2023.
The losses of the past two years followed an era of super profits at the Central Bank where it had generated more than €23.5bn of profits in the 15 years to 2022 in the wake of the financial crisis.
In a blogpost accompanying the publication of the annual report, Central Bank Governor, Gabriel Makhlouf said: “Our financial position remains robust, despite the losses that we incurred as a result of the necessary monetary policy actions to achieve price stability.
“Prior to the use of any provisions, the Central Bank recorded a loss, like a number of other central banks across the world, of €795.4m in 2024,” Mr Makhlouf said.
“Similar to last year, this result was due to the exposures arising from the use of the Central Bank’s balance sheet as a tool for monetary policy – reflecting our mandate to safeguard price stability.”
Mr Makhlouf said that the Central Bank’s role is not to make profits:”Our mission is to serve the public interest by maintaining monetary and financial stability, while ensuring that the financial system operates in the best interests of consumers and the wider economy.”
“We find ourselves facing into a period of both challenge and opportunity for the Irish economy, against an uncertain international backdrop,” he said.
“The global geopolitical landscape faces significant strain and complexity, driven by competing interests, shifting alliances with different values and increasingly independent economic blocs.”
The report states that going forward, the Central Bank’s balance sheet structure and interest rate environment is forecast to reduce the Central Bank’s income over a number of years and to result in losses in 2025, and potentially beyond.
The report states that “while these losses are expected to be covered by the Central Bank’s financial buffers, their full extent is uncertain and will depend on many factors, in particular the monetary policy set by the ECB’s Governing Council to ensure price stability.
The annual report shows that with the rising price of gold, the value of the Central Bank’s gold increased from €722m to €970.76m last year.
The report shows that Mr Makhlouf’s salary last year increased from €316,794 to €331,369 arising from salary increases across the public sector.
Mr Makhlouf is also in receipt of a UK public service pension. The annual report shows that six staff received pay in excess of €240,000 last year with a further 11 receiving pay between €210,000 and €240,000.
The amount paid out in professional fees last year increased from €15.05m to €21.65m.
The spend on legal fees increased from €1.85m to €2.23m and a note states that the costs relate to 26 separate legal cases including €44,000 for settlements in three cases and €400,000 awarded against the Central Bank.
The Central Bank’s insurance company paid €70,000 relating to legal costs and settlements.
Staff expenses, including salaries and allowances of €198m, increased from €221.23m to €246.28m.
Numbers employed increased from 2,234 to 2,263 at the end of last year. Staff hospitality last year increased from €250,000 to €279,000.
Reporting by Gordon Deegan
