In a historic financial report, the Banque de France announced a net loss of €7.7bn for 2024, a figure the bank's governor, François Villeroy de Galhau, described as unprecedented in the institution’s history. The loss, which deprives the State of anticipated tax revenues and dividends, was primarily driven by the European Central Bank's high interest rate environment established last year.
According to de Galhau, the bank posted an operating loss of €17.9bn, partially offset by €10.1bn in accumulated reserves. In contrast, in 2023, an operating loss of €12.4bn was fully counterbalanced, resulting in a net profit of zero. The governor attributed the dramatic losses to a sequence of exceptional events the deflationary impact of Covid-19 in 2020 and the inflationary shock following Russia's invasion of Ukraine in 2022 which necessitated divergent monetary policy responses across the eurozone.
During the first phase, low interest rates enabled the Banque de France to purchase government and corporate bonds at around 0.7%, but as the ECB raised rates to about 4% to combat inflation, the cost of remunerating deposits soared, widening the gap and burdening the bank’s finances.
Despite the record loss, de Galhau assured that the Banque de France's financial situation remains robust and that the loss for 2025 is expected to be significantly lower, eliminating any need for recapitalization from the state. He also expressed confidence that such an extraordinary loss would not recur in the foreseeable future.
