The Swiss central bank posted a healthy result in the third quarter and looks set for a huge full-year profit.
The Swiss National Bank (SNB) generated a profit of 51.5 billion Swiss francs ($52.2 billion) in the first nine months of 2019, the bank said in a statement on Thursday. In the third quarter, the profit amounted to 13 billion (compared with 38.5 billion combined for the first two quarters).
The bank made the most money on its foreign currency positions. In total, the SNB reported a profit of 42.7 billion derived from such assets for the first nine months and a profit of 8.9 billion for the third quarter. The profit on equity securities and instruments was 22.4 billion – a slight increase only over the six-month figure.
Gold Price Hike
Exchange rate-related losses amounted to 8.9 billion francs in the first nine months, up 900 million from the first two quarters.
The surge of the gold price contributed strongly to the performance of the central bank this year so far. The increase in the valuation of the SNB’s gold holdings was 3.8 billion francs by the end of June. Three months later, the bank's gold was already worth 7.3 billion francs more than at the end of 2018. A kilo of gold was worth 47,620 at the end of September, which compares with 40,612 at the end of 2018.
Negative Interest Charged
The SNB generated a profit of 1.7 billion francs on Swiss franc positions, consisting in large parts from negative interest charged on sight deposit account balances. The bank recently agreed to charge less interest from the banking industry to lower the pressure from the negative rate policy on the business.
