The Swiss National Bank (SNB) has reported strong profits for the first half of the year, largely thanks to a weakening franc and gains in the foreign currency market.

The results, published in an SNB press releaseexternal link on Tuesday, show overall profits of CHF5.11 billion ($5.17 billion) for the first six months of 2018, compared with CHF1.22 billion the previous year.

This marks a bounce-back from a disappointing first quarter, which the SNB ended with losses of CHF6.8 billion.

The reasons for the gains was largely related to a “profit on foreign currency positions” which came to CHF5.2 billion, the SNB writes.

In particular, a strengthening of the dollar in relation to the franc largely offset any losses caused by a weakening euro; compared with several years ago, when it was heavily dependent on the European currency, the SNB now holds virtually the same amounts of both.

“Current income” from interest and dividends came to some CHF6.9 billion, while the profits on Swiss franc positions were about CHF1 billion. A loss of just under CHF1 billion was reported on gold holdings.

The bank cautioned that results were strongly linked to shifts in the gold, foreign exchange and capital markets, meaning that “strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result”.

Last year, the SNB recorded a record profit of CHF54 billion. According to the agreement between the bank and the state, a maximum of CHF2 billion of the profits can be distributed annually back to public authorities in Switzerland.

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By Ralph Atkins in Zurich and Roger Blitz in London

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