Mon, Apr 22nd 2024
Analysts predict a historic profit for the Swiss National Bank in the first quarter of 2024, surpassing past records due to favourable exchange rates and asset valuations.
The Swiss National Bank (SNB) is likely to have posted a record result in the first quarter of 2024. Economists at UBS are forecasting a profit of between CHF 50 and 60 billion.
This is likely to significantly exceed the previous record from the second quarter of 2020, according to a study published on Monday.
The main reason for the profit is the weakness of the Swiss franc and the consequences of this on foreign currency holdings. According to the UBS experts, the exchange rate development alone led to a profit of between 35 and 40 billion. They point out that the franc depreciated by just under 5% against the euro and by more than 7% against the US dollar in the first three months.
The positive development on the stock markets and the rise in the price of gold also helped. The equity portfolio of around 170 billion Swiss francs is estimated to have generated a profit of around 15 billion, and the gold portfolio around 8 billion.
On the other hand, the rise in bond yields had a negative impact on the quarterly result, probably amounting to between CHF 5 billion and CHF 10 billion.
The SNB will present the figures next Thursday.
The Confederation and cantons should be wary of budgeting SNB distributions for the coming year, the big bank advises. This is because it is unlikely that the extraordinarily positive development on the financial markets in the first quarter will continue at the same pace. And an appreciation of the Swiss franc once again, cannot be ruled out either.
UBS economists calculate that the SNB would have to achieve an annual profit of at least 65 billion for a minimum distribution, and even more than 105 billion for a maximum distribution.
The background to this is that last year’s balance sheet loss of 53 billion must first be repaid. Added to this is the central bank’s practice of making a minimum allocation of 10% of the (currently: 115 billion).
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