Swiss National Bank reports CHF3.2 billion deficit for 2023

The SNB reported a definitive loss of CHF3.2 billion ($3.6 billion) for the 2023 reporting year. KEYSTONE/© KEYSTONE / ANTHONY ANEX

The Swiss National Bank (SNB) has closed 2023 with a deficit due to the negative impact of the strength of the Swiss franc. There were no disbursements to the Confederation and cantons or in the form of dividends.

The SNB reported a definitive loss of CHF3.2 billion ($3.6 billion) for the 2023 reporting year, following a huge loss of CHF132.5 billion in 2022. However, the figures published on Monday do not come as a surprise: the SNB had previously reported a provisional loss of around CHF3 billion at the start of the year.

The result depends heavily on financial market developments and can fluctuate greatly and even turn out to be significantly negative. The SNB achieved a profit of CHF4.0 billion on its foreign currency positions and a plus of CHF1.7 billion on its gold holdings. However, the SNB incurred a negative result of CHF-8.5 billion from its Swiss franc positions, in addition to CHF0.4 billion in operating expenses.

Dividend payments also unlikely in 2024

After allocating CHF10.5 billion to the accruals for currency reserves to strengthen equity and accounting for the negative distribution reserve of CHF39.5 billion, the overall balance sheet last year showed a loss of CHF53.2 billion.

This amount now also corresponds to the new deficit in the so-called Distribution Reserve, and, in accordance with the provisions of the National Bank Act and an existing agreement between the Confederation and the SNB, makes a payment of dividends impossible. This applies to the Confederation and the cantons as well as to shareholders. A disbursement for this year is therefore also rather unlikely, as the SNB would have to generate a profit of well over CHF60 billion.

Significant rise in the power of the Swiss franc

The detailed accounts for 2023 show that, despite high price gains on equities and bonds, the SNB only achieved a relatively small gain of CHF4.0 billion with its foreign currency holdings due to the development of the Swiss franc. This is made up of price gains of CHF14.8 billion on bonds and CHF34.6 billion on equities, as well as interest and dividend income of around CHF13 billion.

This was offset by exchange rate-related losses totalling CHF58.0 billion. The value of the Swiss franc appreciated significantly against both the US dollar and the euro. At the end of 2023, one dollar cost CHF0.84, compared to CHF0.92 a year earlier. One euro cost CHF0.93 after just under CHF0.99 at the end of 2022.

The profit in Swiss francs on gold holdings of CHF1.7 billion resulted from a 3.1% higher price in gold, while holdings remained unchanged at 1,040 tons. In dollars, however, the gold price would have risen significantly more, by a solid 10%.

Adapted from German by DeepL/dkk/amva

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