Ireland Said to Get Central Bank Payment of Over $2 Billion
(Bloomberg) -- The Irish state received a payment outstripping last year’s 1.8 billion euros ($2.1 billion) from the country’s Central Bank, according to a person familiar with the matter.
The payment flowed from the Central Bank’s earnings for 2017, said the person who asked not to be named as the information is private. Details of the latest payment will be published with the regulator’s annual report on Wednesday in Dublin. The bank declined to comment.
The Central Bank reported a financial profit of about 2.3 billion euros in 2016 and transferred surplus income of about 1.8 billion euros to government. Most of the central bank’s profits in recent years stem from its holding of securities tied to the liquidation of the Irish Bank Resolution Corporation Ltd., which was set up to consolidate a number of institutions including Anglo Irish Bank Corp. during the financial crisis.
In 2013, the nation’s debt office issued about 25 billion euros of long-term bonds, handing them to the central bank in return for the promissory notes which underpinned much of its support from the financial system during the crisis.
To an extent, the profit generated by the bank and paid back to the exchequer is a circular affair. The Central Bank’s profits are linked to interest paid by the state on the securities, as well as debt office buy backs. About 11 billion euros of the notes, in nominal terms, have been bought back so far.
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