The Swiss National Bank recorded the largest loss in its history, hit by foreign exchange valuations. That could put the maximum amount it transfers to the government in jeopardy.
Through the first three quarters of the year, the Swiss National Bank (SNB) reported a loss of 142.4 billion Swiss francs ($145.4 billion), according to a statement from the central bank on Monday. During the same period last year, it reported a 41.4 billion profit.
The bulk of the losses came from the SNB's foreign currency positions which suffered a loss of 141 billion francs. A valuation loss on gold holdings was 1.1 billion francs. Although the volume was unchanged, It lost 24.1 million on its Swiss franc positions.
Because the SNB's results are driven largely by foreign exchange, capital, and gold market developments, «extreme fluctuations cannot be ruled out. Only provisional conclusions are possible as regards the annual result,» the SNB said.
Interest and Dividends
Income on interest and dividends was 5.1 and 3.4 billion Swiss francs, respectively during the first nine months of the year. At the same time, it lost 70.9 billion francs on interest-bearing paper and instruments and another 54.2 billion on equities.
Money to Cantons
Last year, the SNB made maximum payouts to the cantons after reporting an unexpected 26 billion Swiss francs ($28.3 billion) profit for 2021, with the federal government and cantons receiving 6 billion francs.
For this year that is a very unlikely scenario and threatens to leave a hole in the budgets of some cantons, as finews.com reported.
The only positive, and highly unlikely, scenario making a profit distribution possible would be a significant recovery of the stock markets and a depreciation of the franc. Even if that transpires, a maximum payout still would not be possible and threatens budgetary holes, according to the UBS chief investment office global wealth management analysis.
