FRANKFURT: Euro area banks saw their profits fall by a fifth in the first three months of this year as they made less money from trading and most other business areas, European Central Bank data showed on Wednesday.
The ECB survey painted a gloomy picture, with all the main sources of profit for banks - lending, trading and fees - down from the year before. Net profit fell by 20 percent year on year to 18 billion euros ($20.25 billion).
The net result from trading and foreign exchange was one of the main culprits for that drop as it fell by 41 percent to 10.8 billion euros. Other income streams - such as net interest on loans, dividends, and fees and commissions - also declined, albeit more modestly.
Banks have blamed the ECB's policy of ultra-low rates, which includes charging banks for the excess cash they park at the central bank, for eating into their profits.
In cash-rich Germany, several banks have responded by charging fees on bank accounts or charging corporate clients a percentage charge on large deposits.
The ECB has maintained its policy has done more good than harm but it has acknowledged it comes with side effects.
The central bank, which is both the euro zone's monetary authority and its chief bank supervisor, has told banks to cut costs and make their business models less reliant on interest rates.
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