DUBLIN May 3 Bond sales linked to the
resolution of Ireland's banking crisis helped the country's
central bank to a record profit of 2.3 billion euros last year,
1.8 billion of which has been paid to the state to help cut the
The surplus income paid each year to the state has risen as
a result of the government debt the central bank acquired during
the financial crisis, related chiefly to the liquidation in 2013
of the collapsed Anglo Irish Bank.
The value of the bonds have risen in line with the higher
prices attracted by Irish government debt. That has led to large
capital gains over the last three years, when the bonds were
sold more quickly than expected.
The central bank recorded a profit of 2.2 billion euros in
2015, when it returned 1.8 billion euros to the state. Profits
will revert to more modest levels over the medium term as the
effect of the bond sales diminish, it said.
Ireland pledged to slowly feed the new bonds worth 25
billion euros into the market via the central bank as part of an
agreement with the European Central Bank (ECB) to stretch out
the liquidation costs and ease the state's debt burden.
The central bank has until 2033 to sell the bonds. It had
cut the holdings by book value to 19.6 billion euros at the end
The bonds' market value stood at 30.3 billion euros, meaning
there is currently an unrealised gain of 10.7 billion euros, the
central bank said.
The ECB wants Ireland to offload the debt as quickly as
possible and reiterated last month that a more ambitious sales
schedule would further mitigate "persisting serious monetary
It acknowledged that last year's disposals were a step in
that direction and the central bank has sold another 1 billion
euros of the bonds this year.
Announcing the profit, central bank Governor Philip Lane
said that while Ireland's domestic economy continues to improve,
external risks remain significant.
"These include risks relating to the effects of Brexit, but
also the risks associated with any increase in global
protectionism and/or elevated levels of risk aversion in
international financial markets," he said.
(Reporting by Padraic Halpin, editing by Larry King)