Swiss central bank reports $17.7B half-year profit

AP News
Posted: Jul 31, 2014 4:36 AM

GENEVA (AP) — Switzerland's central bank posted a profit Thursday of 16.1 billion Swiss francs ($17.7 billion) for the first half of the year, a big turnaround from its loss of 9 billion francs for 2013.

The Swiss National Bank's profit is largely based on gains in the gold, foreign exchange and capital markets, but the bank was careful to note that for the full year, market swings could yet change the picture.

"Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result," the bank said in its financial statements.

The central bank, which has head offices in the Swiss capital Bern and the financial center Zurich, said that as of the end of June its net profit on foreign currency positions stood at 12.6 billion francs while its gold holdings — often used by investors as a hedge against uncertainty — gained 3.5 billion francs in value.

In January, the bank reported that its 2013 results included a loss of 15 billion francs in the value of its gold holdings, but that was partly offset by gains in foreign currency and from selling its stabilization fund that bailed out Swiss bank UBS AG.

That meant the bank could not provide dividends to shareholders or profits to the Swiss government and the country's 26 cantons (states), many of whose budgets rely on the proceeds.

Gold prices had fallen sharply in 2013 as the U.S. Federal Reserve wound down an inflation policy that had driven up gold prices.