SNB profit melts down
Published: Tuesday, Oct 31st 2023, 09:50
Updated At: Wednesday, Nov 1st 2023, 00:55
Volver a Live Feed
Profits at the Swiss National Bank (SNB) melted away significantly in the first nine months of 2023. Thus, the central bank also suffered a significant loss in the third quarter, having already reported red figures in the second quarter of the year.
For the period January to September 2023, the profit still amounts to CHF 1.7 billion, according to Tuesday's communiqué. While the SNB achieved a plus of 7.0 billion francs on foreign currency positions and also reported a valuation gain of 1.1 billion francs on gold holdings, which remained unchanged in terms of volume, a loss resulted on Swiss franc positions. This amounted to a total of CHF 6.1 billion.
High exchange rate-related losses
As the statement showed, gains on equities and equity instruments stood out positively at 20.5 billion. This was offset by exchange rate-related losses totaling 19.2 billion.
In the third quarter, meanwhile, all positions were negative, which also explains the quarterly loss of almost 12 billion Swiss francs. The second quarter was already deep red at -13.2 billion Swiss francs, following the high plus of 26.9 billion in the first quarter of the year.
Losses on foreign currency positions were particularly large in the third quarter, amounting to 9.2 billion. However, the result on Swiss franc positions was also clearly negative at -2.7 billion. Gold holdings posted a loss of 0.1 million Swiss francs.
Quarterly loss was expected
However, the losses do not come as a complete surprise. The economists at UBS, for example, had forecast a loss of between CHF 5 billion and CHF 10 billion for the third quarter in view of the recent clear deterioration in market conditions.
As usual, the SNB emphasized that its results were largely dependent on developments in the gold, foreign exchange and capital markets. Strong fluctuations are therefore the rule and conclusions can only be drawn from the interim result to the annual result to a limited extent.
Meanwhile, UBS experts believe that a distribution to the federal government and the cantons is unlikely from today's perspective, as they had written in the run-up to the figures. For a minimum distribution, the SNB would have to generate a profit (before allocations to provisions) of 45 to 50 billion francs, for a maximum distribution 85 to 90 billion.
The SNB would therefore have to generate a profit of more than 40 billion in the final quarter for a distribution to be considered in 2024. According to UBS economists, however, this is "extremely unlikely," as the SNB portfolio has a profit potential of 10 to 15 billion francs per year, UBS said. In addition, the downward trend in bonds and equities continued at the beginning of the fourth quarter, they said. Together with the stronger franc, this continues to weigh on the SNB result.
©Keystone/SDA
Spanish 
English 
German 
French 
Arabic