UBS economists predict SNB’s profits in the first quarter billions

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Economists at UBS estimate the Swiss National Bank’s (SNB) profit at 17.5 to 27.5 billion francs, probably contributed by the stock markets and gold. SNB will open its books next Thursday for figures for the first quarter of 2023.

In a forward-looking comment on Monday, UBS wrote that the start of 2023 was a success for SNB. While the environment for financial investments was volatile, it was generally friendly. While gold, stocks and bonds all rose in the first three months, the appreciation of the Swiss franc against the US dollar may have put some pressure on the outcome on the foreign exchange side.

Is there any payment at the end?

However, despite the good start, it will continue to be difficult for the SNB to generate a profit that will enable distribution to the federal government and cantons in 2024, according to UBS. Because first, a balance sheet loss of around 40 billion francs would have to be repaid, and then a provision would have to be made for foreign exchange reserves.

UBS assumes that the SNB will need annual profits of CHF 45 to 50 billion for minimum distribution to the Confederation and cantons. This is hardly possible. UBS experts estimate that the profit potential that lies dormant in SNB’s portfolio is CHF 10 to 15 billion per year.

In 2022, SNB reported a loss of CHF 132.5 billion due to weak development in equities and bond markets worldwide. Therefore, no distribution in the form of dividends was made to the Confederation or the cantons. (SDA)

Source :Blick