The Bundesbank reported Thursday it booked a profit of 1 billion euros ($1.05 billion) for the 2016 financial year, down from 3.2 billion euros a year earlier.

But German Finance Minister Wolfgang Schäuble got even less than the 1 million euros as the central bank was forced to make larger pension provisions, leaving the federal state with just 400,000 euros more in its coffers at the end of the day.

"The profit for the year is lower than in 2015 because the Bundesbank also increased its risk provisioning," President Jens Weidmann said in a statement, noting that the bank had raised its provisions for general risks by 1.8 billion euros to a total of 15.4 billion euros.

Future challenges

Weidmann argued higher provisions were needed because of the interest rate risk arising from the growing stocks of assets held under various monetary policy purchase programs.

The lender warned that for many years to come it stood to earn only a very low rate of interest on long-term securities as well as on longer-term refinancing operations.

All in all, though, the situation of Germany's Bundesbank isn't bad at all as monetary and foreign exchange policy operations boosted the lender's total assets, climbing by a substantial 400 billion euros last year alone to 1,400 billion euros.

"The Bundesbank's total assets have more than tripled since 2006," executive board member Carl-Ludwig Thiele concluded.

hg/jd (dpa, Bundesbank)