National Bank of Switzerland

Main article: Swiss economy

History

2023

Annual loss - $3.5 billion

At the end of 2023, the Swiss National Bank (SNB) received a net loss of 3 billion francs ($3.51 billion at the exchange rate as of January 15, 2024). For comparison, in 2022, record losses were shown at 133 billion francs ($155.8 billion). This is stated in a report published on January 9, 2023.

SNB recorded a profit of 4 billion francs ($4.69 billion) in foreign currency positions and a profit of about 1.7 billion francs ($1.99 billion) from its gold reserves. At the same time, the bank showed a loss of about 8.5 billion francs ($9.96 billion) in positions in national currency. SNB assets fell to 785 billion francs ($919.56 billion) from more than one trillion francs in 2022.

Swiss National Bank

The negative results are partly due to rising interest rates aimed at fighting against. inflation The losses are also largely due to the strengthening of the Swiss franc, which reached its peak against the euro in more than eight years (by 2023). This jump in the value of the franc negatively affected profits from the bank's foreign currency portfolios of shares and bonds. Due to negative indicators, SNB will not be able to make dividend payments to shareholders for 2023, as well as transfer funds to the federal budget Switzerland and cantonal budgets.

The institution needs to compensate for the loss with profit before payments can be resumed. UBS economist Alessandro Bee said that for this the bank needs to earn at least 50 billion francs ($58.57 billion) in 2024. However, negative indicators will not have any impact on SNB monetary policy.

The SNB's first priority is its monetary policy and its balance sheet is solely to support it, says Bee.[1]

Credit Suisse $53.7 billion credit line to avoid its bankruptcy

On March 15, 2023, it became known that in order to avoid bankruptcy Credit Suisse , it would take Switzerland up to $53.7 billion from the National Bank.

"Credit Suisse announces its intention to access a covered NBSC credit facility as well as a short-term liquidity support facility totalling up to CHF 50 billion. This additional liquidity will support Credit Suisse's core operations and customers. "

2022

Annual loss of 132bn francs - a record in the bank's 116-year history

According to the results of 2022, the National Bank of Switzerland registered losses of 132 billion francs, which corresponds to about $142.5 billion at the exchange rate as of January 9, 2023, when the regulator published some results of its activities.

These losses turned out to be the largest in the entire 116-year history of the Swiss Central Bank. It is reported that losses on positions in foreign currency in 2022 amounted to 131 billion francs, on positions in the country's national currency - 1 billion francs. The only profitable asset was gold reserves, the increase in value of which will be 400 million francs.

National Bank of Switzerland Building

A record loss in 2022 means the Swiss National Bank will scrap payments to the country's government and cantons, as well as dividends to the organisation's shareholders. At the same time, the last record for the bank's losses was set in 2015, when the Swiss Central Bank lost 23 billion.

The negative financial result is associated with a sharp strengthening of the franc this year due to the desire of investors to invest in a more stable economy against the background of pan-European volatility, CNBC reports. When inflation averaged 10% in the eurozone, it was at 3% in Switzerland. Nevertheless, according to J.Safra Sarasin analyst Karsten Junius, quoted by Reuters, the bank's colossal losses will not change its monetary policy due to the strong reputation of this financial institution.

By the beginning of 2022, the net worth of the Swiss Central Bank was 204 billion francs. Recorded losses may indicate that this capital can be exhausted. At the same time, the Swiss National Bank itself cannot be declared bankrupt due to the fact that it is engaged in the issue of the Swiss franc.

Annual loss for Swiss National Bank precludes profit distribution

Record loss in the history of the bank - $143 billion in January-October

As of the end of October 2022, the National Bank of Switzerland recorded a record loss in its history: since the beginning of the year, losses amounted to $143 billion. The bank holds most of the reserves ($900 billion) in shares of American companies, treasuries and the EU public debt.

The size of assets on the balance sheet reached 136% of GDP

The ratio of the balance of the Central Bank of some countries (printing money) to their GDP as of June 22, 2022

2020: U.S. stock portfolio rises to record $141 billion

The portfolio of US shares of the National Bank of Switzerland as of December 2020 rose to a record $141 billion, reflecting the growth of the stock market.

Switzerland's central bank has 20% of reserves in shares, and its filing with the U.S. Securities and Exchange Commission in February 2021 showed it held shares in 2,490 companies as of Dec. 31. Notable assets include Apple Inc., Amazon Inc. and even GameStop Corp.

2019: Franc volume in circulation by $85 billion

The gold supply as of August 2019 is $8.7 trillion, the US dollar supply is $1.7 trillion. The volume of rubles in circulation is $150 billion.

2015

Buying Apple shares

In the spring of 2015, the financial world was greatly surprised when it learned that one of the largest buyers of Apple shares was the Central Bank of Switzerland, but, as it turned out, this was not a one-time case.

The National Bank of Switzerland - FRS unlike other large Central Banks - regularly publishes the composition of its portfolio. In July 2015, from the next such report on the eve it became known that the Swiss regulator in the second quarter of 2015 acquired another 500 thousand shares. Apple Thus, the Central Bank now has on its balance sheet a colossal volume of shares in the world's most expensive company - 9.4 million shares. In monetary terms, as of June 30, these shares were valued at $1.2 billion^[2]

It is curious that among the shares in the portfolio of the Central Bank of Switzerland, Apple ranks first in terms of shares, which is almost twice as much as the second largest position - Exxon: $637 million.

Below are data on the main securities in the portfolio of the Swiss hedge fund in the amount of $64 billion.

Fighting the fortification of the franc

The Central Bank of Switzerland in the first half of 2015 lost $52 billion. Of course, this is not due to its activity in the stock market. The reason should be sought in the events on the foreign exchange market. At the beginning of 2015, the Central Bank was forced to abandon the maintenance of the EUR/CHF currency pair at 1.20. After refusing to peg the franc overnight strengthened by almost 20%.

What only the Central Bank of Switzerland did not try to stop the growth of the exchange rate of its currency, but did not gain much success. In mid-June, the NBSH decided to keep the deposit rate at -0.75%. The regulator also reiterated its plans for currency interventions, after it pulled back from curbing the franc's growth five months ago. Negative rates should help weaken the currency over a long period, the statement said.

In fact, the stakes are not very helpful. As confirmation, we can recall the events of the end of June, when, against the background of Greek history, the Swiss Central Bank was forced to intervene in foreign exchange trading on Monday to stabilize the franc, which was rapidly strengthening against the euro.

The fact is that the growing risk of default of Greece provoked a sharp decline in the euro against all currencies, including the Swiss franc. According to the head of the Central Bank of Switzerland Thomas Jordan, the bank took an active part in the auction, trying to keep the exchange rate of the national currency.

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