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SNB profits soar on gold and FX gains

The Swiss central bank has some good news to report – at last

The Swiss National Bank (SNB) has had a tough time dealing with the Hildebrand debacle but according to its latest statement, it has some positive news to report.

In the central bank's annual profit report, it revealed it expects an annual profit of CHF13 billion on the following:

Given the rise in the price of gold, the Swiss National Bank (SNB) has recorded a valuation
gain on its gold holdings of CHF5 billion for the 2011 financial year
. The parent
company's foreign currency positions will contribute approximately CHF8 billion to the
positive result. Its profit will come to roughly CHF13 billion. Owing to the stabilization
fund, the consolidated result is likely to be somewhat better.

The allocation to provisions for currency reserves will absorb CHF3.2 billion of the parent
company profit
. An additional CHF5 billion will serve to fill the gap in the distribution
reserve. In accordance with the agreement between the Confederation and the SNB,
CHF1 billion will be distributed to the Confederation and the cantons. The remaining
profit will be allocated to the distribution reserve.

For more news on the Swiss franc and currency market movements, check out

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