SNB with nine-month profit of over 60 billion francs
Published: Thursday, Oct 31st 2024, 10:20
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The Swiss National Bank (SNB) reports a high profit for the first three quarters of 2024. However, it will not be decided until the end of the year whether distributions to the Confederation and cantons are possible.
According to a statement issued on Thursday, the SNB's profit for the period from January to September amounted to CHF 62.5 billion. After a huge plus of 58.8 billion in the first quarter, this was followed by a small loss of 2.0 billion in the second and now a profit of 5.7 billion in the third. The good performance on the stock markets and the rise in the price of gold were primarily responsible for the good result for the period.
The SNB achieved a plus of 52.4 billion on its foreign currency positions in the nine-month period. The largest item here came from price gains on shares and similar securities at CHF 27.9 billion, while price gains on bonds also amounted to CHF 6.7 billion. Net income from interest and dividends also brought in just under CHF 10 billion.
In addition, there were exchange rate-related gains of CHF 7.9 billion, although the result varied greatly from quarter to quarter due to the development of the Swiss franc. The weakening of the franc at the beginning of the year led to high profits in the first quarter, while the strengthening of the local currency then resulted in corresponding losses. In the third quarter alone, this amounted to over 20 billion.
Gold price rises sharply
Gold continues to look good. The steady rise in the price so far this year has certainly brought the SNB a nice profit. At the end of September, a kilo of gold cost CHF 71,571, almost 30 percent more than at the end of 2023. This meant that the SNB made a book profit of CHF 16.6 billion on its unchanged holdings.
In contrast, a loss of 6.2 billion was recorded on Swiss franc positions. According to the SNB, this was mainly due to the interest paid on banks' sight deposits on SNB sight deposit accounts. The negative result is therefore related to the operational implementation of the SNB's monetary policy.
Dividends uncertain
Whether there will be a distribution to the Confederation and cantons with the result published today is still uncertain, but has at least become somewhat more likely. According to UBS economists, the SNB would have to generate a profit of at least 65 billion in 2024 for a minimum distribution and more than 105 billion for a maximum distribution.
With the nine-month result, the SNB is at least not far off the lower figure. However, a lot can still happen in the fourth quarter: Although sentiment on the financial markets remained good in the first half of October, investors have been much more cautious again since the middle of the month. And the recent increase in volatility could well continue, depending on the outcome of the US presidential elections or developments on the various war fronts around the world.
As usual, the SNB emphasizes in its press release that its result is largely dependent on the development of the gold, foreign exchange and capital markets and that, due to the often strong fluctuations on the financial markets, conclusions from the interim result to the annual result are only possible to a limited extent.
Last year, for example, the SNB posted a high profit in the first quarter - as it did this year - but then had to report a loss at the end of the year.
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