Biggest minus in 100 years
SNB makes 95 billion loss in the first half of the year
The Swiss National Bank (SNB) posted a massive minus in the first half of the year. This was primarily due to price losses on equities and interest-bearing securities.
Markets are weakening around the world. This also affects the Swiss National Bank (SNB). The smallest movements in the high reserves of the SNB, currently around CHF 1,000 billion, result in large profits or losses for the SNB. And due to the Ukraine crisis, inflation and fears of recession, the stock markets are currently in the doldrums. In the first half of the year, the SNB therefore recorded a loss of CHF 95.2 billion, as announced on Friday. This is mainly due to price losses on equities and interest-bearing securities.
In the first quarter, the SNB made a minus of 32.8 billion. Now, in the second quarter, another 62.4 billion were added. The numbers are not entirely surprising – high losses were expected. However, the loss is still slightly higher than economists had previously estimated. It is also the SNB’s biggest loss in its more than 100-year history.
On the foreign currency positions, the SNB made a loss of CHF 97.4 billion in the first half of the year, of which exchange rate-related losses totaled CHF 10.3 billion. On the other hand, the gold holdings, which remained unchanged in terms of quantity, recorded a profit of 2.4 billion Swiss francs. The central bank achieved a small plus of CHF 35.1 million on the Swiss franc positions.
Distributions to cantons
At this point in time, it is not possible to say exactly what the outcome of the distributions from the SNB to the Confederation and the cantons will be, since these depend solely on the annual result or an unappropriated profit at the end of the year. But one thing is clear: if there is no significant recovery on the financial markets, the distributions to the federal government and the cantons are in acute jeopardy.
According to the 2021 annual result, the distribution reserve relevant to the payments amounts to a high CHF 102 billion. However, if the financial markets do not recover significantly in the second half of the year, they will soon be exhausted. Since, according to the UBS economists, the SNB is also likely to make additional provisions of around CHF 10 billion this year, it would have to forego distributions to the federal government and cantons if it were to post an annual loss of around CHF 93 billion.
Depends on the markets
As usual, the SNB emphasized that its results depend primarily on the development of the gold, foreign exchange and capital markets. Strong fluctuations are therefore the rule and conclusions from the interim result to the annual result are only possible to a limited extent.
In 2021 as a whole, for example, the SNB ended up with a profit of over CHF 26 billion, with the first and second quarters being positive and the third and fourth quarters being negative. The year before, the profit was a good 20 billion. But there are also years with high losses, which in each case has to do primarily with weak stock market developments or a very strong Swiss franc. 2018 or 2015 were such years: the local currency watchdogs had to report losses of almost 15 billion or more than 23 billion. (lui/SDA)