Bank of Finland’s operating profit for 2025 again weakened by interest paid on central bank deposits

“The Bank of Finland’s financial standing is strong. The composition of its balance sheet and the financial result are to a large extent determined by monetary policy measures taken to maintain price stability. The interest paid on commercial banks’ deposits with the central bank weakened the Bank of Finland’s operating profit in 2025, as in previous years. The operating loss was nevertheless considerably smaller than in previous years,” says Deputy Governor of the Bank of Finland Marja Nykänen.

The underlying reason for the operating loss is the structural interest rate risk. This risk for the Bank’s balance sheet is associated with implementation of the Eurosystem’s monetary policy purchase programme. The risk materialised when the Governing Council of the European Central Bank (ECB) raised the Eurosystem’s key interest rates in 2022 and 2023 in order to combat excessive inflation. Purchases of monetary policy-related securities were made by creating liquidity that eventually, in the form of commercial banks’ current account holdings, constituted liabilities in the central bank balance sheet. The difference in the extent to which the Bank of Finland’s assets and liabilities are subject to fixed or variable interest rates has been a strain on the operating profit.

Although the interest payable on commercial banks’ deposits with the central bank has decreased by 2 percentage points since June 2024, the interest expenses on the excess liquidity accumulated on the balance sheet still exceeded the income from monetary policy instruments and financial asset instruments. The average deposit facility rate paid on commercial banks’ deposits in 2025 was 2.26%, and the amount of interest paid on these deposits was EUR -1,892 million (2024: 3.73% and EUR -3,697 million). Net interest income in 2025 was EUR -227 million, which was EUR 881 million greater than in 2024.

Holdings of monetary policy-related securities, which are mainly Finnish government bonds, decreased from EUR 82 billion to EUR 71 billion during the year. These, and their counterpart central bank deposits on the liabilities side, will remain on the Bank of Finland’s balance sheet for a considerable time, as they are long-term bonds.

The Bank of Finland’s central banking profit was EUR -122 million in 2025 (2024: EUR -937 million), and includes both interest income on the Bank’s financial assets and its share of net interest income from the Eurosystem’s monetary policy operations. The operating expenses and income of the Bank of Finland and the Financial Supervisory Authority (FIN-FSA), excluding banknote production services and the pension fund contribution, amounted to EUR -78 million (2024: EUR -73 million).

The Bank of Finland’s financial statements, which also include the income and expenses of the FIN-FSA, have been published in Finnish today, 13 March 2026, on the Bank of Finland website. The Swedish and English versions will be published in April.

Bank of Finland Annual Report 2025 (in Finnish)