National bank reports renewed profit
The Swiss National Bank (SNB) says it expects a profit of around SFr6 billion ($6.4 billion) for the 2012 financial year, mainly thanks to its foreign currency positions.
But the announcement on Thursday reflects a drop of more than half from last year's profit of SFr13.5 billion when it was buying a massive amount of euros to hold down the value of the franc.
The result also reflects a loss in the final quarter of 2012 according to analysts. The SNB had announced last year a nine-month consolidated profit of SFr16.9 billion.
It will be the second straight profit for the central bank, after reporting a SFr21 billion loss in 2010 due to foreign exchange losses.
Foreign currency positions accounted for some SFr4.7 billion of the positive result. The SNB’s foreign exchange reserves were worth over SFr427 billion in December, up by more than two-thirds over the previous year because of purchases made to defend the cap versus the euro introduced in 2011.
In addition, the increase in the price of gold resulted in a SFr1.4 billion-valuation gain of the central bank’s holdings.
However, the allocation to provisions for currency reserves will absorb SFr3.6 billion of the profit. As is its custom the bank said it will distribute SFr1 billion among its main shareholders, the federal government and the 26 cantons.
The remaining profit will be allocated to the distribution reserve, increasing it to around SFr5.3 billion.
Definitive figures will be released on March 7, while the SNB’s annual report will be published on April 4.
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