The Swiss National Bank (SNB) has reported a profit of CHF33.7bn (€29bn) for the third quarter of 2017, largely driven by favourable trends on foreign exchange markets.
According to the latest figures presented by the SNB, CHF30.3bn of the overall profit was due to favourable foreign currency positions, while gold holdings contributed CHF2.3bn to the overall profits.
Throughout the last two years,the SNB had faced significant losses as a result of its decision to abandon the fixed exchange rate between Franc and Euro, which led to the bank having to stage significant interventions in the Forex market in order to prevent an extreme appreciation of the Franc, which would have had adverse effects on the export oriented Swiss economy.
However, due to a combination of rising stock markets and a more benign growth outlook for the Eurozone, the Franc has now reached its lowest level since the abandonment of the fixed exchange rate in January 2015, easing pressures on the SNB to intervene in currency markets.
At the same time, the central bank still holds more than CHF700bn in foreign currency reserves and is unable to cash in on its significant assets by selling some of its foreign stocks and bonds without risking a new appreciation of the Franc.
Highlighting the temporary nature of the figures, the central bank stressed that as its financial result was largely dependent on developments in gold, foreign exchange and capital markets: “Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result.”