9. Other financial income/expenses

9. Other financial income/expenses

The following table summarizes other financial income and expense for the years ended 31 December 2017 and 2016.

 

Year ended 31 December

(thousands of €)

2017

2016

Other financial income:

 

 

Interest on bank deposit

3,045

1,614

Effect of discounting long term R&D incentives receivables

99

Currency exchange gain

1,797

8,150

Other finance income

34

87

Total other financial income

4,877

9,950

 

 

 

Other financial expenses:

 

 

Interest expenses

(936)

(47)

Currency exchange loss

(29,176)

(1,453)

Other finance charges

(469)

(191)

Total other financial expense

(30,582)

(1,692)

 

 

 

Total other net financial expense (–) / income

(25,705)

8,257

Other financial expenses increased significantly by €28.9 million, from €1.7 million for the year ended 31 December 2016 to €30.6 million for the year ended 31 December 2017. This increase primarily related to a currency exchange loss of € 27.8 million on deposits held in U.S. dollars. Our cash and cash equivalents include cash held in U.S. dollars, which could generate foreign currency exchange gain or loss in our financial results in accordance with the fluctuation of the EUR/U.S. dollar exchange rate as our functional currency is EUR.

Interest expenses were related to interests on term deposits and on finance lease.

Other financial income decreased by €5.1 million, or 51% from €10.0 million for the year ended 31 December 2016 to €4.9 million for the year ended 31 December 2017. Interest income was related to interests on term deposits.

Net exchange loss amounted to €27.4 million for the year ended 31 December 2017, compared to a net exchange profit of €6.7 million for the year ended 31 December 2016.