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Bank of France profit jumps 58 percent on ECB-buying boost
March 13, 2017 / 11:03 AM / 9 months ago

Bank of France profit jumps 58 percent on ECB-buying boost

PARIS (Reuters) - The Bank of France said on Monday that its net profit rose 58 percent last year, boosted by the European Central Bank’s asset purchasing programme, prompting it to stop setting aside provisions for risks.

FILE PHOTO - Flags of France and Europe hang on the facade of the Bank of France headquarters in Paris May 9, 2012. REUTERS/Charles Platiau

The French central bank reported a net profit of 3.52 billion euros (3.1 billion pounds), up from 2.23 billion in 2015. It will pay corporate tax of 2.0 billion euros after 1.9 billion in 2015.

Overall, the central bank’s contribution to France’s state coffers, including dividends, will reach 4.5 billion euros, it said.

The central bank said it had decided not to put aside any money for its general risk provision fund this year, keeping it at 8 billion euros. The previous year, it had set aside 504 million euros.

“The balance sheet increase was done with high quality assets, mainly French sovereign bonds, with no deterioration of our risk profile,” the bank said in a statement. “There is therefore no reason to continue to beef up our general risk fund.”

The French central bank’s higher profit is in sharp contrast with the situation in Germany, where the Bundesbank reported its smallest profit in more than a decade last month.

Under the European Central Bank’s asset purchase programme, the Bank of France bought 313 billion euros of assets between the end of 2015 and the end of 2016, when its balance sheet reached 855 billion euros.

($1 = 0.9376 euros)

Reporting by Yann Le Guernigou; Writing by Michel Rose; Editing by Ingrid Melander

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