Euroclear reports €6.9 billion in interest from frozen Russian assets, allocates €2 billion to support Ukraine
Belgium-based Euroclear has announced that it earned €6.9 billion in interest income from frozen Russian assets in 2024, a €2.5 billion increase from the previous year. The figures are detailed in their report released on February 5th. Of the total income, €5.39 billion is tied to the Bank of Russia's assets, while €1.5 billion is linked to other Russia-related assets.
According to the report, Ukraine is set to receive approximately €2 billion from this amount in March. Following a 10% contingency reserve to adhere to capital and risk management requirements, Euroclear made an initial payment of roughly €1.55 billion to the European fund for Ukraine in July 2024. A second installment, expected to also be around €2 billion, is anticipated in March 2025.
The financial group notes that declining interest rates in the global economy during 2024 led to slower growth in interest income from the Bank of Russia's frozen assets. Future prospects for interest income are likely to decrease further, pending political decisions affecting these trends.
By the end of 2024, Euroclear held €183 billion in frozen Russian assets. In response to Russia's full-scale invasion of Ukraine, Western nations froze Russian central bank assets—comprised of cash and securities—amounting to approximately €260 billion. Over two-thirds of these are reportedly housed with the Belgian repository. Meanwhile, Russian finance ministry estimates in 2022 placed the value of frozen assets at around $300 billion (approximately €288 billion).
The impact of sanctions has sparked significant legal challenges, prominently in Russian courts throughout 2023, Euroclear reported in their financial statement for that year. The company maintains that it continues to isolate income related to sanctions from its core financial outcomes and intends to retain these earnings until further directives on distribution or management are provided.
To address litigation costs, Euroclear reserves about 10% of the income derived from frozen Russian assets. Nevertheless, officials argue that directly using some of the Russian assets to address these liabilities could be more "cost-effective," though critics question the legality under international law.
In January 2024, European Union nations approved the use of profits from frozen Russian Central Bank assets to aid in Ukraine's economic recovery from military conflict. Advocates for this measure assert that it will "bolster" an existing multilateral scheme aiming to leverage the income from these frozen assets to repay a €45 billion loan extended to Ukraine.