May 9, 2018 / 3:30 PM / 8 months ago

Irish central bank makes record profit on asset sales

DUBLIN, May 9 (Reuters) - Capital gains from a range of assets acquired by the Irish Central Bank during Ireland’s banking crisis contributed to a record profit of 2.6 billion euros last year, with 2.1 billion euros transferred to the state to help cut the national debt.

The assets are mostly related to the liquidation in 2013 of the collapsed Anglo Irish Bank, and have generated an income surplus from interest paid and capital gains on their disposal.

The central bank recorded a profit of 2.3 billion euros in 2016, when it returned 1.8 billion euros to the state. The Central Bank said its headline profits will normalise over the medium term.

Announcing the profit, central bank Governor Philip Lane said the ongoing economic recovery is expected to continue at Irish, European and global levels in the near term, supported by the European Central Bank’s accommodative monetary strategy.

But he cautioned that prudential management of macro-financial tail risks is also necessary.

“Small, highly globalised countries like Ireland are more volatile than larger economies, which means we can grow strongly for extended periods but are especially vulnerable to negative shocks,” Lane said.

“High stocks of both public and private debt and the inherent volatility of the Irish macro-financial system requires ongoing vigilance.” (Reporting by Graham Fahy; Editing by Catherine Evans)

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