Swiss National Bank: Half-year Results

The central bank reaped the rewards of surging share and bond prices, along with substantial dividend and interest payments. In a stunning turn of events, the central bank reported a staggering loss last year, setting a new record in the process.

Unprecedented Deficit

The Swiss National Bank (SNB) has concluded the initial six months of the year with a profit of CHF 13.7 billion. In a recent announcement this week on Monday, the Swiss National Bank (SNB) revealed that income was generated through various avenues, including the surge in share and bond prices, as well as the receipt of dividend and interest payments. However, it was not all smooth sailing for profits, as the appreciation of the franc had a detrimental impact. The central bank has reported a staggering loss of 132.5 billion francs, setting a new record for financial setbacks. This deficit has had far-reaching consequences, as the federal government and cantons were left empty-handed for the first time in six years, with no funds being disbursed. 

Increase of Gold Holdings 

In the first half of the year, foreign currency holdings yielded a substantial profit of 16.2 billion francs. Interest and dividend income, along with price gains on interest and equity securities, were counterbalanced by losses attributed to fluctuations in exchange rates. In a significant development, the Swiss National Bank (SNB) has reported a notable increase in the value of its gold holdings. The latest figures reveal a surge of CHF 1.2 billion, highlighting the growing significance of this precious metal in the bank’s portfolio. In a significant financial setback, Swiss franc positions, including interest on current accounts, incurred a staggering loss of CHF 3.4 billion.

The outcome of the Swiss National Bank (SNB) is contingent upon the volatility in the valuation of its extensive foreign exchange reserves, comprising a vast sum of hundreds of billions of Swiss francs. These reserves encompass a diverse portfolio of international shares and bonds. For several years, the central bank has been actively purchasing euros and other foreign currencies in order to prevent the franc from appreciating. The franc is highly sought after as a safe haven during times of economic crisis, and such appreciation could have strong effects on the economy.