Belgian National Bank shares 16 per cent lower after the announcement of heavy losses

Belgian National Bank shares are down more than 16 per cent on Wednesday morning after the central bank announced heavy losses on Tuesday. The National Bank of Belgium is expected to lose 600 to 800 million euros this year. Moreover, the losses may continue until 2027, totalling 9 billion euros. The expected losses are due to recent increases in the European Central Bank's (ECB) policy interest rates, the National Bank claims.

The National Bank of Belgium expects a loss of 600 and 800 million euros by the end of the year. However, the final result may still vary "depending on the portfolios valued at market value held by the Bank". The expected loss means that the financial buffers built up over the past few years, which now stand at 7.08 billion euros, will be drawn down for the first time at the end of this financial year.

Based on current market expectations, the National Bank of Belgium expects to incur losses up to and including the 2027 financial year. In that case, total losses could reach 9 billion euros.

"A central bank can operate, at least temporarily, with a negative capital position"

Meanwhile, the bank assures that there is no problem with the stability of the Belgian National Bank. "After all, a central bank can operate, at least temporarily, with a negative capital position," it assured. Nevertheless, ​ investors sent the stock down more than 16 per cent on Wednesday morning.

According to the Belgian National Bank, the expected losses are due to the recent increases in the European Central Bank's (ECB) policy interest rates. ""Against the increased interest charges on the deposits of credit institutions with the Bank are the low yields at which the mostly long-term securities in the monetary policy portfolios were purchased," the bank noted.

^{BELGA PHOTO Nicolas Maeterlinck}