4 months ago

Swiss National Bank: Record Profits and Future Fund Distribution

In 2024, the Swiss National Bank $SNBN.SW reported a record annual profit of 80.7 billion Swiss francs (approximately 89.5 billion USD), marking a historic achievement facilitated by rising stock markets, a strengthening US dollar, and increased gold prices. This impressive result exceeded forecasts and restored the bank's fiscal performance after experiencing losses in 2023.

How the Swiss National Bank Achieved Record Profits

The remarkable profit was primarily driven by successful investments in foreign currency bonds, equities, and gold. In 2024, SNB achieved:

- 67.3 billion francs from its positions in foreign currency bonds and equities.

- 21.2 billion francs from gold sales.

These gains were made possible by favorable global market conditions. In particular, stock markets recorded growth, and there was a significant rise in gold prices, which positively impacted the bank's financial results.

Improved Financial Performance Compared to 2023

In 2023, the Swiss National Bank suffered losses amounting to 3.2 billion francs. However, despite this setback, SNB substantially improved its financial standing in 2024, surpassing analyst expectations and setting a new profit record.

Impact on Government and Shareholders

With the record profit achieved in 2024, the Swiss National Bank is positioned to once again distribute funds to both the federal government and the cantons of Switzerland for the first time since 2021. It is anticipated that:

1. Net profit for SNB will amount to 15.9 billion francs, including a negative distribution reserve of 53.2 billion francs.

2. The bank will distribute a dividend of 15 francs per share.

3. Three billion francs will be allocated as profit to both the federal government and the cantons, with one-third directed to the federal budget and two-thirds assigned to cantonal budgets.

How SNB's Profit Will Affect the Swiss Economy

1. Impact on the federal budget: One-third of the distributed profit will support federal government programs, potentially enhancing the funding of various state initiatives.

2. Cantonal support: The cantons, receiving two-thirds of the funds, can channel this money into regional infrastructure development and social projects.

3. Dividends for shareholders: Dividend payments, while a lesser portion of the total sum, provide shareholders with additional profit, reinforcing the bank's positive reputation.

Future Prospects for the Swiss National Bank

Despite the economic instability caused by global crises, the Swiss National Bank continues to demonstrate solid financial results. Forecasts for 2025 also suggest moderate profit growth, which could influence the bank's future policy direction.