The Swiss National Bank (SNB) has announced that it anticipates a CHF23bn (€21.15bn) loss in 2015 but pledged to maintain a dividend payments and ordinary profit distributions to its shareholders, suggesting that it expects the CHF exchange rate to stabilise.
The central bank is privately owned, with the majority of shares belonging to cantons and banks cantons, consequently, a dividend cut would have had a significant impact on the budgets of Swiss canton budgets.
The SNB anticipates that its loss on foreign currency positions to be around CHF20bn (€18.39bn) in 2015, in addition, the central bank also booked a CHF4bn (€3.68bn) loss on its gold holdings and CHF1.4bn (€1.29bn) to the provision of currency reserves.
Despite the annual total loss and allocation amounting to CHF24.5bn, the results remain below the SNB’s distribution reserve of CHF27.5bn (€25.29bn). With the allocation of CHF15 (€13.79) dividend per share and an ordinary profit distribution of CHF1bn, the distribution reserve remains now at a mere CHF2bn (€1.8bn).
Following the abandonment of the fixed exchange rate between euro and CHF in January 2016, foreign exchange markets responded with a steep appreciation pressure on the franc, which took the role of a safe haven currency.
In the first half of 2015, the SNB has booked more than CHF50bn (€45.98bn) losses, consequently, the annual loss of CHF23bn (€21.15bn) represents a gradual improvement of the CHF exchange rate. Despite stock market volatility in China, the franc remained stable against the euro.
A detailed report of the SNB’s figures will be released in March 2016.
(All exchange rates as of 08 January 2016, 11:00am UK time)