SNB Plans Extra 1 Billion Franc Payout to Government, Cantons
(Bloomberg) — The Swiss National Bank plans to pay out an additional 1 billion francs ($1.09 billion) to the federal and cantonal governments, a move that will likely be welcomed by municipal budget chiefs as the economy faces a slowdown in growth.
The SNB, based in Bern and Zurich, said today it will pay out a total of 2 billion francs to the federal government and the cantons, pending confirmation of its final figures for last year on March 6.
The franc surged against the euro this month after the SNB gave up its cap of 1.20 per euro. That leaves the economy at risk of a slowdown, SNB officials have said.
“It cannot be determined at this stage whether a profit distribution for 2015 will be possible following the discontinuation of the minimum exchange rate,” the SNB said in a statement today. “This can only be assessed after the end of the current financial year.”
The SNB posted a preliminary profit of 38 billion francs for 2014. Because of its large foreign exchange reserves, swings in asset prices can cause considerable fluctuations in the SNB’s profit.
Switzerland’s 26 cantons are the central bank’s biggest shareholders. Together with the government, they receive an annual payment of 1 billion francs if the distribution reserve isn’t negative.
After failing to receive money for 2013, cantonal budget chiefs earlier urged the SNB to give them more money for 2014 to offset shortfalls in revenue from other sources.
To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net To contact the editors responsible for this story: Fergal O’Brien at fobrien@bloomberg.net James Kraus, Kevin Costelloe
