Bank of Estonia profit grows to EUR 34.1 mln in 2012

Photo: SCANPIX

Net profit of the Bank of Estonia increased to 34.1 million euros last year from the year-earlier 22.7 million euros.

According to audited figures net income totaled 50.3 million euros compared to 42 million euros the year before, the central bank said.

Net income was reduced by a first-time general risk provision in the amount of 11.5 million euros. The provision gives primary protection against risks in addition to the existing reserves.

"Central banks of the eurozone, the Bank of Estonia among them, have in the course of crisis solving jointly taken well-considered but nonetheless major risks. In order to reduce the increased risks it is sensible to set apart a part of the earned income in a provision right away," Bank of Estonia governor Ardo Hansson commented.

The central bank's income from common Eurosystem activities - monetary policy and cash emission - was 51.6 million euros compared to the year-earlier 20.2 million euros.

Income from investment decreased to 8.1 million euros from 14.7 million euros in 2011. In the framework of investment activities the bank started investing in stocks in May 2012 so as to hedge risks and its stock portfolio amounted to 15 million euros at the end of the year.

The central bank's operating expenses declined to 16.2 million euros last year compared to 19.4 million euros in 2011. Cash-related expenses and the one-off cost of euro changeover excluded, operating expenses increased by 1 percent in annual comparison.

Personnel expenses grew 2 percent to 7.9 million euros whereas administrative expenses decreased 3 percent to 5.2 million euros.

The supervisory board of the central bank will discuss profit distribution at its May 7 meeting. Since 1992 the central bank has paid a total of 115 million euros of its profit into the state budget.