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29 Finance costs

millions of €








Interest income




Interest expense








Of which: from leases




Of which: from financial instruments relating to measurement categories in accordance with IFRS 9




Debt instruments measured at amortized cost




Debt instruments measured at fair value through profit or loss




Financial liabilities measured at amortized costa





Interest expense calculated according to the effective interest method and adjusted for accrued interest from derivatives recognized in the reporting year that were used as hedging instruments against interest rate-based changes in the fair values of financial liabilities measured at amortized cost in the reporting year for hedge accounting in accordance with IFRS 9 (2023: interest income of EUR 303 million and interest expense of EUR 845 million, 2022: interest income of EUR 273 million and interest expense of EUR 284 million, 2021: interest income of EUR 417 million and interest expense of EUR 284 million).

Finance costs increased from EUR 5.3 billion to EUR 5.7 billion. The EUR 0.9 billion increase in interest expense was mainly due to the sale and leaseback of passive network infrastructure in Germany and Austria in connection with the sale of the GD tower companies, which resulted in an increase in the carrying amounts of the lease liabilities, and due to the reversal of adjustments to carrying amounts in connection with the premature repayment of bonds in fair value hedges. By contrast, interest income increased by EUR 0.5 billion, primarily due to an increase in cash on hand invested in interest-bearing money-market investments, where the returns generated were higher than in 2022. In addition, interest income resulted from the aforementioned premature repayment of bonds below face value, and from the reversal of related cash flow hedges on a pro rata basis.

Interest of EUR 207 million (2022: EUR 125 million, 2021: EUR 211 million) was capitalized as part of acquisition costs in the reporting year. The amount was calculated on the basis of an interest rate in the average range between 3.4 % at the start of the year and 4.2 % at the end of the year (2022: between 3.4 % and 3.4 %, 2021: between 3.6 % and 3.4 %) applied across the Group.

Interest payments (including capitalized interest) of EUR 7.9 billion (2022: EUR 6.9 billion, 2021: EUR 6.4 billion) were made in the reporting year.

Accrued interest payments from derivatives (interest rate swaps) that were designated as hedging instruments in a fair value hedge in accordance with IFRS 9 are netted per swap contract and recognized as interest income or interest expense depending on the net amount. Finance costs are assigned to the measurement categories on the basis of the hedged item. Only financial liabilities were hedged in the reporting period.