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(Bloomberg) -- The Swiss National Bank expects to record a 2014 profit of 38 billion francs ($37.3 billion) as its foreign- currency and gold holdings gained in value.
The central bank, based in Bern and Zurich, will resume its annual payout of 1 billion Swiss francs to the federal government and the cantons, and also pay a maximum dividend of 15 francs per share to investors. For 2013, the SNB scrapped its annual payment after a 30 percent drop in the price of gold caused a loss of 9 billion francs.
Last year gold gained 10 percent in franc terms, while the dollar appreciated more than 11 percent against the Swiss currency. The euro declined about 2 percent as investor anxiety about the region’s feeble recovery and Russia’s economic crisis kept up interest in the franc as a safe investment.
The SNB gold holdings recorded a 4 billion-franc valuation gain last year, while the profit on its foreign-currency positions amounted to some 34 billion francs, according to preliminary numbers today. Final figures are due March 6.
As of late December, the SNB held foreign-exchange reserves of a record 495.1 billion francs, with a big portion in dollars and euros. Swings in asset prices can therefore cause considerable fluctuations in the SNB’s profit.
Capital inflows from Russia led the SNB to announce last month it was buttressing its three-year-old cap on the franc of 1.20 per euro with a negative deposit rate. The measure takes effect on Jan. 22.
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 appropriation of profit.
After failing to receive money for 2013, cantonal budget chiefs earlier this month urged the SNB to give them more money for 2014 to offset shortfalls in revenue from other sources.
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