Swiss central bank profit cut almost in half in 2012
The Swiss National Bank on Thursday posted a 2012 profit of 6.9 billion Swiss francs (5.6 billion euros, $7.2 billion), nearly half of what it earned in 2011, owing to slipping income from foreign currency holdings.
In 2011, Switzerland's central bank, SNB, posted a profit of 13.5 billion Swiss francs.
But last year, foreign currency positions added 4.5 billion Swiss francs to the bank's profit, down from 7.7 billion a year earlier, it said in a statement.
The drop was due in particular to exchange rate losses linked to the strengthening of the Swiss franc against the yen and the dollar, the central bank said.
SNB has also been working hard to prevent the Swiss franc from gaining too much in value against the euro as investors, unsettled by the eurozone debt crisis and uncertain US economic prospects, fled to the perceived Swiss safe haven.
The central bank has repeatedly vowed to maintain a euro exchange rate ceiling of 1.20 francs to avoid penalising Swiss exporters.
SNB also said Thursday that rising gold prices boosted the value of its holdings of the precious metal by 1.4 billion Swiss francs, but the gain was far less than a year earlier when the value of its holdings shot up by 5.4 billion francs.
The bank meanwhile made significant profits on interest-bearing commercial paper and other financial instruments amid generally lower interest rates, while a favourable stock market helped boost its equity stakes, offsetting some of its heavy exchange rate-related declines.
The stabilisation fund created in 2008 in connection with the rescue of Switzerland's biggest bank, UBS, also contributed 939 million Swiss francs to the 2012 consolidated profit -- far more than the 23 million it brought in a year earlier.
SNB said that one billion francs of its profit would be redistributed to the Swiss Confederation and to Swiss cantons.
© 2013 AFP