The Government has received a payment of about €2.1 billion from the Central Bank, according to a source.
The transfer flowed from the bank’s 2018 earnings, with details to be published with the regulator’s annual report on Wednesday. The bank declined to comment.
The bank posted a financial profit of about €2.6 billion in 2017 and handed over surplus income of about €2.1 billion euros. The 2018 payment is of a similar scale, the person said.
Most of the Central Bank's profits stem from its holding of securities tied to the liquidation of the Irish Bank Resolution Corporation, set up to deal with failing institutions including Anglo Irish Bank during the financial crisis.
Promissory notes
In 2013, the National Treasury Management Agency issued about €25 billion of long-term bonds, giving them to the Central Bank in exchange for so-called promissory notes. The Central Bank had used these notes to prop up much of the banking system as it flirted with collapse.
To an extent, the profit and transfer is a circular affair. The Central Bank’s profits are linked to interest paid by the State on the securities, as well as NTMA buy backs. In March, the NTMA said it had bought back €14.5 billion, in nominal terms, of the notes, and added another €500 million last week. – Bloomberg
