Monetary policy SNB achieves high half-year profit
The Swiss National Bank (SNB) posted a high profit in the first half of 2024. In the second quarter alone, however, there was a small loss. Distributions remain unlikely.
31.07.2024, 07:36
31.07.2024, 08:48
SDA
According to a statement on Wednesday, the profit for the period from January to June of the current year amounted to CHF 56.8 billion. After a profit of 58.8 billion in the first quarter, this resulted in a loss of 2.0 billion francs in the second quarter. The strong performance on the equity markets, a significantly weaker franc over the entire semester and the higher gold price were the main reasons for the high half-year profit.
The SNB achieved a plus of CHF 49.3 billion on its foreign currency positions in the first half of the year. The largest item here came from exchange rate-related gains of 29.5 billion, but price gains on equities etc. were also high at 19.8 billion. There was also income from interest and dividends, while interest-bearing securities (bonds, etc.) recorded price losses.
In the second quarter alone, however, the calculation looks quite different: That's when foreign currency positions brought a total loss of CHF 3.3 billion. This is mainly due to the fact that the Swiss franc strengthened again somewhat in the period between April and June after a very weak first quarter.
Sharp rise in gold price
The SNB result benefited greatly from the development of the gold price. There was a valuation gain of CHF 12.2 billion on its unchanged holdings, with just under CHF 9 billion coming from the first quarter and a good CHF 3 billion from the second quarter. At the end of June, a kilo of gold cost a good CHF 67,000, over 20 percent more than at the end of 2023.
By contrast, the Swiss franc positions recorded a loss of CHF 4.5 billion in the first half of the year. According to the SNB, this was mainly the result of interest paid on banks' sight deposits on SNB sight deposit accounts amounting to CHF 3.6 billion, as well as interest expenses from liquidity-absorbing operations.
Distributions still unlikely
Despite the high profit in the first half of the year, a distribution to the Confederation and cantons is still very uncertain from today's perspective. 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.
As usual, the SNB emphasizes in the press release that its result is largely dependent on the development of the gold, foreign exchange and capital markets and that conclusions from the interim result to the annual result are only possible to a limited extent due to the often strong fluctuations on the financial markets. Last year, for example, the SNB posted a high profit in the first quarter (CHF 26.9 billion), as in 2024, but then had to report a loss of CHF 3.2 billion at the end of the year.
However, the result can also swing sharply upwards due to the high dependence on the financial markets. However, as the stock markets have already risen sharply in the first half of the year and the Swiss franc could well strengthen again in the wake of political and economic uncertainties, further high SNB profits in the second half of the year are rather unlikely according to economists.
