The Swiss National Bank posted an annual profit of 48.9 billion Swiss francs ($50.71 billion), the central bank said on Monday, and said it would double its payout to Switzerland’s regional and central governments, reports Reuters. The SNB made a profit of 40.3 billion francs from its foreign currency positions in 2019, boosted by big gains from foreign currency investments bought to weaken the safe-haven franc.
It also made a 6.9 billion franc gain from its gold holdings and 2.1 billion from its Swiss franc positions, it said. The profit was the second-largest in the bank’s 113-year history and meant the SNB can increase its payout to 4 billion francs to the Swiss federal government and to cantons. The increase, from the usual 2 billion franc payout, came after the SNB and the Swiss finance ministry signed an agreement to increase the maximum profit distribution in case of big profits.
One third of the money will go to the Swiss government and two thirds to the country’s cantons, and could head off some of the criticism of the SNB for its negative interest rates policy. The central bank charges the world’s lowest interest rate of -0.75% on commercial bank deposits it holds over a certain threshold, a measure designed to weaken investor appetite for the franc.
