The Swiss National Bank (SNB) reported a profit of CHF25.17 billion ($39.2 billion) for the first half of 2023, primarily driven by gains in foreign currency holdings. The bank announced the results on Friday, highlighting that foreign currency positions generated a profit of CHF31.7 billion, largely from equity securities and instruments totaling CHF22.9 billion. Interest income contributed CHF6.7 billion, while dividend income added CHF1.7 billion, and foreign exchange gains amounted to CHF2.5 billion.
Key Details
Despite the overall profit, the SNB faced challenges from its gold holdings, which resulted in a capital loss of CHF6.4 billion. The price of gold per kilogram fell to CHF104,812 by June 30, down from CHF110,919 at the end of December. Additionally, the bank recorded a loss of CHF1.7 billion related to interest-bearing securities and interest rate instruments, alongside interest expenses of CHF0.4 billion. Positions held in Swiss francs contributed a modest CHF0.1 billion to the profit, mainly from interest earned on current account funds.
Background
The second quarter of 2023 saw a profit of CHF25.67 billion, a notable recovery from a loss of CHF0.5 billion in the first quarter. The SNB indicated that significant fluctuations in results are common, making it challenging to predict the outcome for the remainder of the financial year. An allocation to the provision for currency reserves will be finalized at the end of the year based on this profit.
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The profit announcement is likely to influence the Swiss franc, as strong performance in foreign currency holdings may bolster investor confidence in the SNB's financial stability. Investors will watch for further developments in gold prices and their potential impact on the bank's future earnings, particularly in light of the upcoming monetary policy meeting scheduled for September 2023.