Swiss National Bank posts record H1 loss, says no policy impact

A common view exhibits the constructing of the Swiss Nationwide Financial institution (SNB) in Zurich, Switzerland June 23, 2022. Image taken with a drone. REUTERS/Arnd Wiegmann

ZURICH, July 29 (Reuters) – The Swiss Nationwide Financial institution (SNBN.S) reported a first-half lack of 95.2 billion Swiss francs ($100.08 billion) on Friday, the largest six-month loss because the central financial institution was based in 1907.

Inventory market declines, falling bond costs and the franc’s appreciation severely dented the worth of its huge international foreign money holdings.

The SNB reported a second-quarter lack of 62.4 billion francs, additionally its worst ever quarterly efficiency.

“The loss is historic, however most of it’s an unrealised paper loss regarding decrease valuations of bonds and shares,” mentioned Credit score Suisse economist Maxime Botteron, who mentioned the outcome was unlikely to be a fear for the SNB.

“I do not suppose this may have any impact on the SNB’s financial coverage in any respect, the one affect could also be on the general public funds as a result of the SNB’s payout to the federal government and cantons could possibly be much less subsequent 12 months.”

As a central financial institution the SNB can’t have liquidity issues as a result of it could possibly meet its fee obligations by printing cash.

In the course of the half 12 months, the SNB made a lack of 97.4 billion from its international foreign money positions — its shares and bond portfolio — whereas it made a 2.4 billion franc revenue on its gold holdings. learn extra

The loss was worsened by a ten.3 billion loss resulting from change charges, because the stronger franc additional diminished the worth of international investments.

An SNB spokesperson reiterated on Friday that the loss had no affect on the SNB’s value stability mandate.

SNB Chairman Thomas Jordan had mentioned final 12 months that making income was not the SNB’s intention and wouldn’t have an effect on its financial coverage aim of holding inflation beneath 2%.

“The SNB’s financial coverage mandate at all times takes priority, and there may also be instances when fulfilling this mandate means accepting losses,” he advised the financial institution’s shareholders in April 2021.

The central financial institution in June raised rates of interest for the primary time in 15 years because it goals to get a grip on rising inflation, with extra hikes anticipated. learn extra

($1 = 0.9512 Swiss francs)

Reporting by John Revill; modifying by Michael Shields and Jason Neely

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