July 31, 2019 / 6:07 AM / 4 months ago

Swiss National Bank profit boosted as other central banks turn expansive

FILE PHOTO: A Swiss flag is pictured in front of the Swiss National Bank (SNB) in Bern, Switzerland May 2, 2019. REUTERS/Denis Balibouse//File Photo

ZURICH (Reuters) - The Swiss National Bank (SNBN.S) reported a first half profit of 38.5 billion Swiss francs (£31.97 billion), helped by the expansive mood of other central banks that have boosted global equity markets and pushed up the price of gold.

The profit, up from 5.12 billion francs a year earlier, came as the SNB made a 33.8 billion francs from valuation gains, dividends and interest payments from the shares and bonds bought to weaken the Swiss franc.

It also made a valuation gain of 3.8 billion francs on its gold holdings, the SNB said on Wednesday, as the global price of the precious metal got tailwinds from low interest rates.

The SNB’s foreign currency holdings, built up during its long campaign to weaken the highly valued franc, stood at 778 billion francs at the end of June.

“The SNB’s profit has gained from the global rally in the prices for stocks and bonds in recent months, but I don’t think they will be celebrating because this has been caused by the anticipation of looser monetary policy,” said Alessandro Bee, an economist at UBS.

Reporting by John Revill

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