https://www.ft.com/content/d9f7f670-97fd-33f3-8a4d-cf7c9ceb54ac
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https://www.ft.com/content/d9f7f670-97fd-33f3-8a4d-cf7c9ceb54ac
Ralph Atkins YESTERDAY Switzerland’s central bank made bumper profits on its currency holdings in 2017, with a performance that would put many an ambitious hedge fund manager to shame. The Swiss National Bank said on Tuesday it expects to report profits of around SFr54bn ($55bn), the largest in its history, thanks to a weaker franc and buoyant global stock markets. The steep rise in profits – up from SFr 24.5bn in the previous year – highlights the turnaround at the Swiss National Bank since the start 2015, when it was forced to abandon its attempts to cap the value of the super-strong Swiss franc. The sharp rise in the Swiss currency three years ago – a time when the European Central Bank was aggressively loosening monetary policy in the eurozone – led to the SNB reporting a loss of SFr 23.3bn in 2015, largely as a result of losses on its foreign currency positions. In contrast, the franc’s decline last year, which accelerated from late July, increased the value of the SNB foreign currency investments – which stood at SFr725bn at the end of September. In a statement on Tuesday, the SNB said it expected profits of SFr49bn for 2017 on its foreign currency positions. There would also be a SFr3bn valuation gain on its gold holdings. Shares in the SNB, which as founded as a joint stock company in 1907, more than doubled in price last year to exceed SFr4,000. One explanation for the steep rise was that investors were expecting a big payout. But SNB dividends are fixed by law at a maximum of SFr15 per share – the amount the SNB confirmed shareholders would receive for 2017. Some SFr 2bn would be distributed to Swiss federal government and the country’s 26 cantons. Photo: EPA
Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here.
https://www.ft.com/content/d9f7f670-97fd-33f3-8a4d-cf7c9ceb54ac
Ralph Atkins YESTERDAY Switzerland’s central bank made bumper profits on its currency holdings in 2017, with a performance that would put many an ambitious hedge fund manager to shame. The Swiss National Bank said on Tuesday it expects to report profits of around SFr54bn ($55bn), the largest in its history, thanks to a weaker franc and buoyant global stock markets. The steep rise in profits – up from SFr 24.5bn in the previous year – highlights the turnaround at the Swiss National Bank since the start 2015, when it was forced to abandon its attempts to cap the value of the super-strong Swiss franc. The sharp rise in the Swiss currency three years ago – a time when the European Central Bank was aggressively loosening monetary policy in the eurozone – led to the SNB reporting a loss of SFr 23.3bn in 2015, largely as a result of losses on its foreign currency positions. In contrast, the franc’s decline last year, which accelerated from late July, increased the value of the SNB foreign currency investments – which stood at SFr725bn at the end of September. In a statement on Tuesday, the SNB said it expected profits of SFr49bn for 2017 on its foreign currency positions. There would also be a SFr3bn valuation gain on its gold holdings. Shares in the SNB, which as founded as a joint stock company in 1907, more than doubled in price last year to exceed SFr4,000. One explanation for the steep rise was that investors were expecting a big payout. But SNB dividends are fixed by law at a maximum of SFr15 per share – the amount the SNB confirmed shareholders would receive for 2017. Some SFr 2bn would be distributed to Swiss federal government and the country’s 26 cantons. Photo: EPA
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