Zurich, April 25, 2024 – The Swiss National Bank (SNB) announced a profit of nearly 59 billion Swiss francs (CHF) for the first quarter of this year, boosted by a weaker franc and a rally in equity markets. This is also the highest quarterly profit in the bank’s history.
The SNB said it made a profit of CHF 58.8 billion (€60.16 billion) in the first three months of this year. This beat the previous record of CHF 38.9 billion set in the second quarter of 2020. In comparison, the bank reported a profit of CHF 26.9 billion for the same period last year. For the whole of 2023, it reported a loss of over CHF 3 billion as it raised interest rates from negative to positive in an effort to combat inflation.
The Q1 2024 result is also better than the CHF 40-50 billion profit that UBS economists had forecast.
The quarterly result was heavily influenced by the central bank’s foreign currency positions. In this area, the SNB made a profit of CHF 52.4 billion in Q1. This was helped by a rally in global equity markets at the start of the year, as well as a decline in the value of the Swiss franc. The franc lost 5% against the euro and around 7.5% against the US dollar in Q1.
At the same time, the value of the SNB’s gold holdings also increased significantly. This is due to the sharp rise in the gold price in Q1 (15%), as markets reacted to rising tensions in the Middle East.
For the whole of last year, the SNB had already announced a loss of CHF 3.2 billion at the beginning of March. This means that, as in the previous year, the bank will not make any payments to the federal government and the Swiss cantons this year either. This will be the third time since its foundation in 1906.
Like other central banks, the SNB has also raised interest rates in an effort to get inflation under control. It has raised them from negative territory, which means that the SNB has had to pay interest to commercial banks that have deposited money with it. In times when interest rates were in negative territory, the opposite was true, and commercial banks had to pay interest on deposits with the central bank.
However, the SNB’s loss for last year is nowhere near the size of the loss for 2022. In that year, it reached CHF 132.5 billion, which was the highest loss in the central bank’s history. The SNB’s previous record loss was CHF 23 billion in 2015.
(1 EUR = 0.9774 CHF) Source: Swiss National Bank: https://www.snb.ch/
Additional details:
- The SNB’s profit was driven by a weaker Swiss franc and a rally in equity markets.
- The bank’s foreign currency positions made a profit of CHF 52.4 billion in Q1.
- The value of the SNB’s gold holdings also increased significantly in Q1.
- The SNB will not make any payments to the federal government or the Swiss cantons this year.
- The bank raised interest rates from negative territory in an effort to get inflation under control.
Key points:
- The SNB’s profit of CHF 58.8 billion is the highest quarterly profit in its history.
- The profit was driven by a weaker Swiss franc and a rally in equity markets.
- The bank’s foreign currency positions made a profit of CHF 52.4 billion in Q1.
- The SNB will not make any payments to the federal government or the Swiss cantons this year.
- The bank raised interest rates from negative territory in an effort to get inflation under control.
