A Swiss National Bank payout to the Swiss government and cantons for 2024 is looking less likely after losses in the second quarter halved the central bank’s early-year profits.
(Bloomberg) — A Swiss National Bank payout to the Swiss government and cantons for 2024 is looking less likely after losses in the second quarter halved the central bank’s early-year profits.
The SNB reported a half-year profit of 13.7 billion francs ($15.7 billion), according to a statement Monday, down from a gain of 26.9 billion in the three months through March.
Switzerland’s central bank earned 16.2 billion francs from its large foreign-currency holdings as the appreciation of the franc weighed on the global rally in equity markets. It also saw a 1.2 billion-franc profit on its gold holdings.
While SNB’s portfolio did well with profits of 2.8 billion francs on bonds and 26.2 billion on equities, the profit on foreign-currency positions was reduced by exchange-rate losses of 19.6 billion.
Results still beat a forecast by UBS economists Alessandro Bee and Florian Germanier, who had predicted a first-half profit between 2 and 12 billion francs.
They estimate that the institution needs to earn between 45 billion and 50 billion francs this year so it can resume paying a dividend for 2024. A payout for this year is already out of the question, according to the economists.
Last year, the SNB saw the worst loss in its history with a shortfall of 132.5 billion francs, forcing it to omit the regular payment to shareholders, the Swiss government and cantons for only the second time since the institution was founded in 1906.
The central bank’s results are heavily influenced by developments in markets, so quarterly results are primarily a snapshot.
Earnings from SNB’s operations don’t influence monetary policy. Third-quarter results are due Oct. 31.
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