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Business

German central bank posts biggest profit since 2008

Germany's central bank has provided some good news for the Finance Ministry. It logged the highest profits in five year, with earnings to be transferred into state coffers directly and without any deductions.

Following a couple of meager years, German Finance Minister Wolfgang Schäuble will be able to boost the federal budget with higher-than-expected profits made by the country's central bank.

The

Bundesbank

announced Thursday its net earnings for 2013 came in at 4.6 billion euros ($6.42 billion), 2.6 billion euros more than had been penciled in by the government in Berlin. The figure for last year compared with only 664 million euros a year earlier and marked the largest profit since 2008.

Bundesbank chief Jens Weidmann (pictured) said 2013 earnings were largely due to over seven billion euros in yields on capital accrued

despite record-low interest rates

.

Optimistic outlook

Weidmann said no more risk provisions had to be built up last year after signs of a nascent pickup in eurozone economies.

Watch video 01:11

German gold heading home

"The necessary alignment measures in the wake of the debt dilemma have come a long way in the nations hit hardest by the crisis, and confidence among market players is returning slowly, but surely," the central bank chief said in a statement.

Weidmann mentioned the negative impact of plunging gold prices, with the Bundesbank's reserves now valued at 88.1 billion euros, down a third from a year earlier. The bank is currently in the process of repatriating its bullions stored in New York and Paris. By 2020, half of the country's gold reserves, about 3,400 tons, are to be based in Germany itself.

hg/slk (dpa, Reuters, AFP)

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