The Swiss National Bank (SNB) has reported a strong profit for 2024, projecting a net profit of approximately 80 billion francs. This turnaround follows a loss of 3.2 billion francs in the previous year.
The profit is attributed to favorable conditions in foreign currency positions, which contributed around 67 billion francs, as well as valuation gains on gold holdings amounting to 21.2 billion francs. However, the SNB did face a loss of 7.4 billion francs on its Swiss franc positions.
The SNB's profit surge is driven by several factors, including the rise in gold prices, buoyant stock market performance, and the appreciation of the US dollar against the Swiss franc.
As a result of this performance, the SNB will distribute 3 billion francs to the Confederation and cantons, adhering to established regulations. This distribution will be divided, with one-third allocated to the Confederation and two-thirds to the cantons.
Despite the positive outlook, concerns have been raised about the sustainability of these gains and the SNB's expansive monetary policy. The SNB's decision to pursue an expansive monetary policy has drawn scrutiny, especially in the context of rising operating costs. The bank's approach to managing its balance sheet and distribution reserves will be critical in maintaining financial stability and ensuring it can respond effectively to future economic challenges.
The market's reaction to the SNB's profit announcement has been largely positive, with investors expressing confidence in the bank's ability to navigate the current economic climate. The anticipated dividend payment of 15 francs per share further underscores the bank's commitment to returning value to its shareholders.
However, the broader implications of the SNB's financial performance extend beyond immediate profit distributions. The interplay between gold prices, currency valuations, and global economic conditions will continue to shape the bank's strategies moving forward.