ZURICH, March 6 (Reuters) – The Swiss Nationwide Financial institution (SNBN.S) reported on Monday an annual lack of 132.5 billion Swiss francs ($141.54 billion), according to the provisional calculations it introduced in January.
The loss, the largest within the central financial institution’s 115-year historical past, was brought on by a plunge within the worth of the SNB’s investments brought on by bond and inventory market declines final yr.
A strengthening of the Swiss franc additionally had a adverse impact, decreasing the SNB’s holdings and returns from overseas investments after they have been transformed again into Swiss francs.
The loss, which adopted a revenue of 26 billion francs in 2021, means the SNB will make no payout to the Swiss central or regional governments or dividend to buyers for under the second time because it was established in 1907.
Most of final yr’s shortfall might be attributed to the 131.5 billion francs misplaced on overseas foreign money positions, with its bond holdings shedding 72 billion francs in worth and its share portfolio price 41 billion francs much less.
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The reported loss worn out the SNB’s distribution reserve of 102.5 billion francs, which means the central financial institution posted a web lack of 39.5 billion francs after an allocation for provisions was taken under consideration.
The SNB, which is because of give its subsequent financial coverage replace on March 23, declined to touch upon how the loss might have an effect on its future financial coverage.
Analysts didn’t suppose it might affect the matter, with the SNB having 66 billion francs in fairness regardless of the large losses.
“Even when fairness was worn out altogether this wouldn’t change financial coverage within the brief time period because the SNB can function with out fairness,” mentioned UBS economist Alessandro Bee.
“Solely within the case of a chronic interval of adverse fairness I’d see an influence on financial coverage. However we’re removed from such a state of affairs even after the large lack of final yr.”
($1 = 0.9361 Swiss francs)
Reporting by John Revill
Modifying by Bernadette Baum, Kirstne Donovan
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