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Swiss central bank eyes record profit for 2014

Switzerland’s central bank on Friday said it expected record profits of 38 billion Swiss francs (31.6 billion euros) in 2014 on the back of gains from its foreign currency holding.

The bank said it would make a profit of 34 billion Swiss francs ($33 billion) from its foreign currency holdings and four billion Swiss francs from its gold holdings, according to provisional estimates.

The final figures will be published on March 6, the Swiss National Bank (SNB) said.

Earlier this week, data from the bank showed the total value of its foreign currency reserves had swelled to a record 495.1 billion francs by the end of December.

The bank has been hoarding foreign currency in a bid to hold down the value of the franc, which has been strengthening with the Russian ruble crisis sending investors scurrying to the safe haven currency.

The prospect of further stimulus measures by the European Central Bank has also been putting extra pressure on the franc.

SNB has vowed to buy “unlimited quantities” of foreign currencies to protect an exchange-rate floor of 1.20 francs to the euro it introduced in September 2011, as a strong franc could hurt the country’s vital export industry.

The bank also showed a marked improvement in its gold performance, after registering a net loss of 9.1 billion Swiss francs in 2013 due to plunging gold prices.

This led it to cancel the payment of dividends to its biggest shareholders, the country’s 26 cantons, for the first time since its creation in 1907.

The bank said Friday that it would pay one billion Swiss francs this year to the Swiss Confederation and the cantons. In addition, it will pay dividend of up to 15 Swiss francs per share.