SNB Had a Loss in Q2; Payout to Cantons, Govt in 2024 Not Likely
August 01, 2023SNB’s Profit
The Swiss National Bank reported a half-year profit of CHF13.7 billion (around $15.7 billion as per latest average exchange rate), according to a statement issued on Monday. In the first three months of the year the bank reported a CHF26.9 billion gain. This means for the second quarter the bank noted substantial loses. Still the result of CHF13.7 billion gain for H1 is above economists’ expectations. Forecast by UBS economists Alessandro Bee and Florian Germanier saw a first-half profit between CHF2 and 12 billion. In the first six months of the year Switzerland’s main bank earned CHF16.2 billion from holdings denoted in foreign currencies after exchange rate of CHF was going up versus other currencies, and at the same time its appreciation hurt global equity markets. From gold holdings the SNB saw a profit of CHF.12 billion. The SNB’s portfolio of bonds resulted in profits of CHF2.8 billion, while on equities in CHF26.2 billion. However, the profit on positions of foreign currencies was reduced by exchange rate losses of CHF19.6 billion. Financial results of the SNB do not have any influence on its monetary policy. Third-quarter results are due on October 31.
No Dividend and Payout?
As the central bank of Switzerland noted losses in Q2 the payout of dividend to shareholders as well as a payout to the Swiss government and cantons for 2024 is looking very unlikely. To pay dividend in 2024 the institution would need to earn in a range between CHF45 billion and CHF50 billion this year, according to economists. For this year the SNB surely won’t pay its shareholders anything. Last year the SNB also didn’t pay any dividend and it omit its annual payout to the Swiss cantons and government – only for the second time since 1906, when the bank was founded. In 2022 the bank noted the worst loss in history with a downfall of CHF132.5 billion. It looks like this year it would be forced to skip payout to Swiss government and cantons for a second year in a row.