PARIS: The Bank of France reported a fall in net profit in 2014 due to a cut in interest rates and as banks borrowed less from the central bank.
Net profit dropped to 2.07 billion euros ($2.24 billion) in 2014 from EUR2.44 billion in 2013.
This change results mainly from monetary policy decisions taken during the year,” the Bank of France said in a statement. The European Central Bank cut its refinancing rate to a record low of 0.05% last year and the central bank’s forward guidance has reassured banks, prompting them to borrow less liquidity, the Bank of France said in the statement.
The small amount of quantitative easing at the end of the year–before the ECB announced its large scale asset purchase plan in January 2015–didn’t have a significant impact on the Bank of France’s results.
The Bank of France said that it will pay EUR2.15 billion in taxes and EUR590 million into its general risk fund. The fund is usable in the case of a bank default, or a default on debt held by the Bank of France. It now stands at EUR7.5 billion.
