Financial Statements
Notes on the profit and loss account
1. Interest income
Interest income from and outside the euro area totalled EUR 981.3 million. Of this, EUR 86.3 million consisted of foreign currency-denominated interest income and EUR 895.1 million of euro-denominated interest income.
The interest rate on overnight deposits was negative throughout the year, meaning interest was charged on central bank deposits. In addition to overnight deposits, such negative interest was also earned on minimum reserve deposits in excess of the minimum reserve requirements.
ESCB items – claims equivalent to the transfer of foreign reserves to the ECB, claims and liabilities relating to the ECB’s share of euro banknotes and to the application and adjustment of the ECB capital key, as well as TARGET2 balances – are remunerated at the interest rate on the main refinancing operations (MRO). Since the MRO rate was 0% throughout 2021, no interest income was earned from ESCB items.
| Foreign currency-denominated interest income received outside the euro area (EUR m) |
2021 | 2020 | Change |
| Interest income from coupon bonds | 55.2 | 91.2 | -36.0 |
| Income from discount papers | 0.3 | 0.1 | 0.2 |
| Interest income from deposits | 0.0 | 0.3 | -0.3 |
| Dividends | 25.7 | 20.5 | 5.3 |
| Other interest income | 1.9 | 4.3 | -2.4 |
| Total | 83.2 | 116.3 | -33.1 |
| Euro-denominated interest income received outside the euro area (EUR m) | 2021 | 2020 | Change |
| Interest income from coupon bonds | – | 0.0 | -0.0 |
| Interest income from deposits | 0.2 | 0.0 | 0.2 |
| Other interest income | 20.3 | 6.4 | 13.9 |
| Total | 20.5 | 6.4 | 14.1 |
| Foreign currency-denominated interest income received from the euro area (EUR m) | 2021 | 2020 | Change |
| Interest income from coupon bonds | 3.1 | 4.7 | -1.6 |
| Interst income from deposits | 0.0 | 3.2 | -3.2 |
| Total | 3.1 | 7.9 | -4.8 |
| Euro-denominated interest income received from the euro area (EUR m) | 2021 | 2020 | Change |
| Interest income from coupon bonds | – | -0.1 | 0.1 |
| Income from discount papers | 0.1 | 2.0 | -1.9 |
| Interest income from deposits | 0.0 | – | 0.0 |
| Dividends on euro-denominated investments | 3.9 | 8.8 | -4.8 |
| ESCB items | – | – | – |
| Interest income from monetary policy lending | – | – | – |
| Interest income from monetary policy securities | 200.6 | 233.3 | -32.7 |
| Interest income from negative interest rates on credit institutions' deposits | 633.4 | 428.3 | 205.2 |
| Other interest income | 36.4 | 53.9 | -17.5 |
| Total | 874.6 | 726.2 | 148.4 |
| Total interest income (EUR m) | 2021 | 2020 | Change |
| Foreign currency-denominated interest income received outside the euro area | 83.2 | 116.3 | -33.1 |
| Euro-denominated interest income received outside the euro area | 20.5 | 6.4 | 14.1 |
| Foreign currency-denominated interest income received from the euro area | 3.1 | 7.9 | -4.8 |
| Euro-denominated interest income received from the euro area | 874.6 | 726.2 | 148.4 |
| Total | 981.3 | 856.8 | 124.5 |
2. Interest expenses
| Foreign currency-denominated interest expenses paid outside the euro area (EUR m) | 2021 | 2020 | Change |
| Interest expenses on deposits | – | -0.0 | 0.0 |
| Other interest expenses | -1.4 | -3.0 | 1.6 |
| Total | -1.4 | -3.1 | 1.7 |
| Euro-denominated interest expenses paid outside the euro area (EUR m) | 2021 | 2020 | Change |
| Other interest expenses | – | -0.0 | 0.0 |
| Total | – | -0.0 | 0.0 |
| Foreign currency-denominated interest expenses paid in the euro area (EUR m) | 2021 | 2020 | Change |
| Other interest expenses | – | -0.0 | 0.0 |
| Total | – | -0.0 | 0.0 |
| Euro-denominated interest expenses paid in the euro area (EUR m) | 2021 | 2020 | Change |
| Interest expenses on monetary policy lending | -321.8 | -119.4 | -202.4 |
| Other interest expenses | – | -3.2 | 3.2 |
| Total | -321.8 | -122.6 | -199.2 |
| Total interest expenses (EUR m) | 2021 | 2020 | Change |
| Foreign currency-denominated interest expenses paid outside the euro area | -1.41 | -3.1 | 1.7 |
| Euro-denominated interest expenses paid outside the euro area | – | -0.0 | 0.0 |
| Foreign currency-denominated interest expenses paid in the euro area | – | -0.0 | 0.0 |
| Euro-denominated interest expenses paid in the euro area | -321.82 | -122.6 | -199.2 |
| Total | -323.2 | -125.7 | -197.5 |
3. Net interest income
| Net interest income (EUR m) | 31 Dec 2021 | 31 Dec 2020 | Change |
| Interest income | |||
| Financial assets | 147.2 | 195.2 | -48.0 |
| Monetary policy items | 834.1 | 661.6 | 172.5 |
| ESCB claims | – | – | – |
| Total | 981.3 | 856.8 | 124.5 |
| Interest expenses | |||
| Financial assets | -1.4 | -6.3 | 4.9 |
| Monetary policy items | -321.8 | -119.4 | -202.4 |
| ESCB liabilities | – | – | – |
| Total | -323.2 | -125.7 | -197.5 |
| NET INTEREST INCOME | 658.1 | 731.1 | -73.0 |
4. Foreign exchange rate differences
This item includes realised exchange rate gains and losses arising from the sale of currency positions. In 2021, gains related to exchange rate movements amounted to EUR 4.9 million.
5. Securities price differences
This item includes realised gains and losses arising from the sale of securities. In 2021, realised gains from the sale of securities amounted to EUR 44.5 million.
6. Valuation losses related to currencies and securities
This item consists of valuation losses related to currencies and securities. Each security type and currency is treated separately. There were no valuation losses related to currencies in 2021. Valuation losses related to securities totalled EUR 28.1 million.
7. Change in foreign exchange rate and price difference provision
Realised net gains arising from foreign exchange rate and price differences, totalling EUR 21.2 million, were used to increase the foreign exchange rate and price difference provision in accordance with the accounting conventions. All provisions have been specified in the notes on the balance sheet under liabilities.
8. Income and expenses on fees and commissions
The item includes fees and commissions related to investment activities.
9. Net result of pooling of monetary income
| Monetary income (EUR m) | 31 Dec 2021 | 31 Dec 2020 |
| Net monetary income pooled by the Bank of Finland | 507.5 | 476.5 |
| Net monetary income allocated to the Bank of Finland | 21.5 | 79.3 |
| Monetary income reallocation for the year | -486.0 | -397.2 |
| Corrections to monetary income reallocation of previous years | 2.8 | -1.1 |
| Share of provision against counterparty risks | – | 1.6 |
| Total | -483.1 | -396.7 |
This item contains the net result of pooling of monetary income for 2021, amounting to an expense of EUR 486.0 million in comparison to an expense of EUR 397.2 million in the previous year.
The amount of monetary income of each Eurosystem national central bank (NCB) is determined by measuring the annual income that derives from the earmarkable assets held against its liability base. Any interest paid on liabilities included within the liability base is to be deducted from the monetary income to be pooled. Where the value of a NCB’s earmarkable assets exceeds or falls short of the value of its liability base, the difference shall be offset by applying to the value of the difference the latest available marginal rate for the Eurosystem’s main refinancing operations.
The table below specifies the items that comprise the earmarkable assets and the liability base as well as the remuneration rate applied to each item.
| Earmarkable assets | Remuneration rate | Liability base | Remuneration rate |
| Amount of gold holdings in proportion to each NCB's capital key share | 0% | Banknotes in circulation | Not applicable |
| Claims equivalent to the transfer of foreign reserves to the ECB (except gold) | Main refinancing operations rate |
Liabilities to euro area credit institutions related to monetary policy operations denominated in euro | Rate of return |
| Lending to euro area credit institutions related to monetary policy operations denominated in euro | Rate of return | Net liabilities arising from balances of TARGET accounts | Main refinancing operations rate |
| CBPP, CBPP2, PSPP - government/agency bonds and PEPP - government securities | Main refinancing operations rate |
||
| SMP, CBPP3, PSPP - Supra, CSPP and PEPP (excluding PEPP - government securities) | Rate of return | ||
| Claims on non-Eurosystem central banks that relate to liquidity-providing operations | Actual interest income (including accruals) | ||
| Accrued coupon interest related balances on impaired securities held for monetary policy purposes and for which full income/risk sharing applies | Not applicable | ||
| Net claims related to the allocation of euro banknotes within the Eurosystem | Main refinancing operations rate |
||
| Accrued interest relating to regular monetary policy operations with a maturity of over 1 year | Not applicable |
The monetary income pooled by the Eurosystem is to be allocated among NCBs according to the subscribed ECB capital key. The difference between the monetary income pooled by the Bank of Finland amounting to EUR 507.5 million and reallocated to the Bank of Finland amounting to EUR 21.5 million is the net result arising from the calculation of monetary income.
10. Share in ECB profit
The ECB distributed EUR 383 million profit for the financial year 2020, of which the Bank of Finland’s share recorded for the financial year 2021 totalled EUR 7.0 million.
11. Income from other equity shares and participating interests
This item includes the Bank of Finland’s share, EUR 2.8 million, in income on the Securities Markets Programme (SMP) portfolio, the expanded asset purchase programme (APP) portfolio and the pandemic emergency purchase programme (PEPP) portfolio distributed by the ECB in the form of interim profit distribution for the financial year 2021. The item also includes dividends received on shares in the BIS, EUR 6.7 million.
12. Other income
This item consists of income of the Financial Supervisory Authority (FIN-FSA), EUR 37.7 million. The item also includes income from real estate, EUR 5.3 million, and commissions and fees.
13. Staff costs
| Staff costs (EUR m) | 31 Dec 2021 | 31 Dec 2020 |
| Salaries and fees | 49.6 | 45.8 |
| Employer's contributions to the pension fund | 9.4 | 8.9 |
| Other staff-related costs | 2.1 | 1.9 |
| Total | 61.1 | 56.6 |
| Average staff size | 2021 | 2020 |
| Number of staff | Number of staff | |
| Bank of Finland | 368 | 355 |
| Financial Supervisory Authority | 239 | 231 |
| Total | 607 | 586 |
| Basic salaries paid to the members of the Board (EUR) | 2021 |
| Olli Rehn | 280,979 |
| Marja Nykänen | 254,749 |
| Tuomas Välimäki | 207,128 |
| Total | 742,856 |
Fringe benefits (meal benefits, company-paid telephone and company car) paid to the members of the Board totalled EUR 42,991.70.
Pension benefits of the members of the Board are determined according to the Bank of Finland’s Pension Rule, without special terms and under same terms and conditions as confirmed in the Rule for other personnel. As applicable, the Bank of Finland’s Pension Rule is in line with the Public Sector Pension Act. A former board member may be paid compensation for income loss if the person may not, because of qualifying period provisions, accept employment from elsewhere or if the pension from the Bank of Finland is less than the compensation for income loss. Full compensation for income loss amounts to 60% of salary and is paid for one year, adjusted with the pension paid by the Bank, so that the sum of full compensation and pension does not exceed 60% of salary.
14. Pension fund contribution
Approved by the Parliamentary Supervisory Council, the Bank of Finland paid a contribution of EUR 10 million to the Bank’s pension fund in 2021 to cover the pension fund’s deficit for the financial year.
15. Administrative expenses
| Administrative expenses (EUR m) | 2021 | 2020 |
| Supplies and purchases | 0.5 | 0.4 |
| Machinery and equipment | 7.4 | 7.0 |
| Real estate | 8.9 | 8.5 |
| Staff-related expenses | 1.0 | 1.3 |
| Purchase of services | 15.1 | 13.7 |
| Other | 2.3 | 2.1 |
| Total | 35.2 | 32.9 |
This item includes rents, meetings and interest group-related costs, expenses arising from the purchase of services and cost of equipment. Expenses involved in training, travel and recruitment of staff are also recorded under this item.
16. Depreciation of fixed assets
| Depreciation of tangible fixed assets (EUR m) | 31 Dec 2021 | 31 Dec 2020 |
| Buildings | 3.7 | 3.6 |
| Machinery and equipment | 2.6 | 2.5 |
| Total | 6.2 | 6.1 |
| Depreciation of intangible fixed assets (EUR m) | 31 Dec 2021 | 31 Dec 2020 |
| IT systems | 2.8 | 2.8 |
| Total | 2.8 | 2.8 |
17. Banknote production services
Costs related to banknote production services totalled EUR 4.5 million.
18. Other expenses
The majority of other expenses relate to collection costs, exchange rate and rounding differences and other similar costs.
19. Income of the pension fund
This item includes the Bank of Finland’s and the FIN-FSA’s employer contributions and employee’s share of premium income, totalling EUR 13.2 million, as well as a contribution of EUR 10 million paid by the Bank to the pension fund. Income from the pension fund’s real estate, EUR 1.7 million, is also recorded under this item.
20. Expenses of the pension fund
This item includes pensions paid, EUR 28.6 million, the pension fund’s management costs and depreciation of the pension fund’s fixed assets.
21. Changes in provisions
This item includes the increase of the provision against real value loss, EUR 58 million. All provisions have been specified in the notes on the balance sheet under liabilities.
22. Profit for the financial year
Profit for the financial year 2021 totalled EUR 52.5 million. The Board proposes to the Parliamentary Supervisory Council that EUR 26.3 million of the profit be made available for the needs of the State.