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Net interest income totalled €2,277 million in 2018 (2017: €1,812 million). Net interest income on foreign reserve assets increased to €862 million (2017: €534 million) owing to higher interest income earned on the US dollar portfolio. Net interest income arising from the APP increased by €245 million, to €820 million, as a result of the continuing securities purchases under this programme and the higher yields of the securities acquired during the year compared to the historical yield of the portfolio. Conversely, as a result of redemptions, net interest income earned under the Securities Markets Programme (SMP) decreased to €384 million (2017: €447 million). The ECB’s interest income from its SMP holdings of Greek government bonds amounted to €127 million (2017: €154 million).
Realised losses arising from financial operations amounted to €77 million (2017: realised gains €161 million), owing to realised price losses generated in the US dollar portfolio.
Write-downs amounted to €69 million (2017: €105 million), primarily as a result of a decrease in the market value of a number of securities held in the US dollar portfolio alongside an increase in the corresponding yields.
Impairment tests are conducted on the securities held by the ECB in its monetary policy portfolios, which are valued at amortised cost (subject to impairment). Based on the results of these tests, no impairment losses have been recorded for these portfolios.
The fees charged to supervised entities amounted to €518 million (2017: €437 million). These fees are charged in order to recover expenses incurred by the ECB in the performance of its supervisory tasks. The increase in 2018 relates predominantly to work associated with comprehensive assessments and EBA stress testing.
Total staff costs decreased to €515 million (2017: €535 million) owing to a non-recurring charge included in 2017 in relation to post-employment, other-long term and termination benefits for ECB staff. Other administrative expenses increased to €599 million (2017: €539 million), mainly owing to the increase in expenses related to the ECB’s supervisory tasks.
The ECB’s net profit is distributed to the euro area national central banks (NCBs).