Due to the expected loss, the financial reserves built up in recent years, which currently amount to 7.08 billion euros, will have to be used for the first time at the end of this financial year.
In addition, losses are also expected in the coming years. Based on current market expectations, the BNB estimates that it will suffer until the financial year 2027 inclusive. “If such a scenario were to materialize, which again is surrounded by great uncertainty, with an unchanged balance sheet composition, this would lead to total losses of around 9 billion euros. over this period.”
If all these losses were to consume the financial shock absorbers, this would however not pose a problem for the stability of the National Bank, she assures. “Indeed, a central bank can operate, at least temporarily, with a negative capital position.”
The expected losses are due to recent increases in key interest rates of the European Central Bank (ECB), further explains the BNB. “Interest charges on the deposits that credit institutions hold with the Bank have increased, while the assets, most often long-term, that make up these portfolios were accompanied by low yields when they were acquired” , she develops.
The day after the September warning, National Bank’s stock had lost about a quarter of its value.