EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 20 February  2013  
on the profit distribution of the Bank of Greece  
(CON/201 3/15) 
 
Introduction and legal basis  
On 31 January  2013, the European Central Bank (ECB) received a request from the Bank of Greece for 
an opinion on draft  legislative provisions  amend ing the Statute of the Bank of Greece (hereinafter the 
‘draft provisions ’). 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and on the third indent of Article 2(1) of Council Decision 98/415/EC 
of 29 June 1998 on the consultation of the European Central Bank by national authorities regardi ng draft 
legislative provisions1, as the draft provisions  relate to the Bank of Greece. In a ccordance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft provisions  
The draft provisions amend Article 71 (3) of the Statute of the Ba nk of Greece  on the appropriation of its 
profits
2. In particular, the proposed amendment  expressly en ables the Bank of Greece to transfer to the 
Greek State its income accruing from  its Securities Market P rogramme  (SMP) portfolio . 
 
2. General observations  
The ECB notes that  the proposed amendment to the Statute of the Bank of Greece has to be seen in the 
context of  the Eurogroup statement  on Greece  of 27 November 20123. According to th is statement, the 
euro area Member States would be prepared to consider i nitiatives , including a ‘ commitment by Member 
                                                 
1 OJ L 189, 3.7.1998, p. 42.  
2  Article 71 of the Statute of the Bank of Greece was last amended by Article 165(7)(i) of Law 4099/2012 (FEK 
250/20.12.2012) ratifying the decision of the 79th Annual General Meeting of Shareholders of the Ban k of Greece of 
24 April 2012 . A new paragraph 3 was added to Article 71, expressly enabl ing the Bank of Greece to transfer to the 
Greek State for the financial years 2012 -2020  its income from bonds it held in its investment portfolio on 31 December 
2011. The ECB issued  Opinion CON/2012/31 on the relevant draft provisions.  All ECB Opinions are published on the 
ECB’s website at www.ecb.europa.eu .  
3  Available on the Council’s website at www.consilium.europa.eu.  
ECB -PUBLIC  
2 States to pass on to Greece’ s segregated account, an amount equivalent to the income on the SMP 
portfolio accruing to their national central bank as from budget year 2013’ .  
 
3. Transfer of Bank of Greece ’s SMP  income to the Greek State  
3.1  Article 71(3) of the Statute of the Bank of Greece currently p rovid es that exceptionally for the 
fiscal years 2012  to 2020 , and following a decision of its  General Council implementing an 
international agreement, the Bank of  Greece ’s income resulting from  Greek government bonds held 
in its investment portfolio on 31 December 2011 may be transferred to the Greek State . It further 
specifies that t he transfer of such income will  take place after the payment of the 12% dividend on 
the capital, provided that the regular reserve fund has been funded up to the amount of the capital 
of the Bank of Greece and that the income transferred does  not exceed the remaining amount of net 
profits . While the draft provisions are intended to supplement Article 71(3), the ECB notes that 
their interaction with the other provisions of Article 71 on the appropriation of the Bank  of 
Greece’s profits must  ensure a robust framework for the profit distribution by the  Bank of Greece, 
as outlined below.  
3.2 The transfer of the Bank of Greece’s  investment portfolio income  currently  provided for in 
Article  71(3) , as well as of the SMP income under the draft provisions , must comply with the 
monetary financing prohibition laid down in Article 123 of the Treaty, which prohibits overdraft 
facilities or any other type of credit facility with a  national  central bank  (NCB)  in favour of the 
public sector. Article 123 of the Treaty prohibits, in particular, the distribution of central bank 
profits that have not been fully realised, accounted for and audited and the distribution of income 
outside the statutory profit distribution rules. In order to comply with the monetary financing 
prohibition, the Bank of Greece’s income from Greek government bonds as well as from the SMP  
portfolio may only be transferred to the State as part of the normal profit distribution and subject to 
the condition that the net profit of the year exceeds that income4. The draft provisions  may create 
the impression that it is not the  ‘profits’ but ‘income’ stemming from these bonds  that is the subject 
of the  transfer . An amend ment  to the draft  provisions would thus be  warranted , to reflect the above 
profit distribution principle. This would ensure clarity and be consistent with the scope of 
applicat ion of Article 71, which is the sole Article of Section XIII en titled ‘Appropriation of 
profits’ . 
3.3  In addition, the distribution of profits must comply with the principle of financial independence5. 
Profits may be distributed to the State budget only a fter any accumulated losses from previous 
years have been covered and financial provisions deemed necessary to safeguard the real value of 
the NCB’s capital and assets have been created6. The ECB understands that the  financial provisions 
specified in the f irst sentence of Article 71(1) will always be constituted prior to  the distribution of 
                                                 
4  See also paragraph 3.1.1 of Opinion CON /2012/31.   
5  See also paragraph 3.1.2 of Opinion CON/2012/31.  
6  See also page 27 of ECB ’s Convergence Report 2012.  
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3 any profits , including where  the exceptional distribution rules of Article 71(3)  apply. In relation to 
accumulated losses from previous years,  the ECB notes that current ly Article 71(1) does not 
explicitly provide that such  losses may be covered prior to the  profit distribution. The ECB 
understands that the relevant principles on profit distribution enshrined in Greek company law  
apply in this respect and that, according to such principles, accumulated losses from previous years 
are covered before profit distribution7. However, i n line with the requirements for  financial 
independence , as described above , and c onsidering that other deductible items are explicitly  
referred t o in Article 71(1) , the consulting authority could consider amend ing the profit distribution 
rules  specified in the Statute of the Bank of Greece in order to  explicitly provide that p rofits may be 
distributed to the State budget not only after the above fi nancial provisions have been created but 
also after any such accumulated losses from previous years have been covered .  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 20 February  2013.  
 
[signed]  
 
The Vice -President of the ECB  
Vítor CONSTÂNCIO  
                                                 
7  See codified  Law 2190/1920 on sociétés anonymes in particular Articles 44a et seq. A ccording to Art icle 72 of the 
Statute of the Bank of Greece, th e provisions of the laws on s ociétés anonymes  and banks apply to the Bank of Greece , 
unless they conflict with its  Statute .