SNB posts $50bn profit on boost from foreign equity investments

The Swiss National Bank announced a profit of SFr48.9bn ($50.88bn) on Monday, powered by huge gain in foreign equity investments, including Apple and Amazon, and a holding of more than 1000 tonnes of gold.

The windfall makes the SNB one of the world’s most successful investors in 2019 — outperforming the savviest traders in the hedge fund and asset management industries.

“The profit on foreign currency positions amounted to SFr40.3bn. A valuation gain of SFr6.9bn was recorded on gold holdings. The profit on Swiss franc positions was SFr2.1bn,” the bank said in a statement on Monday.

The bumper payout has increased the political pressure on the bank from Bern to share in its success.

The federal government and cantons will now receive SFr4bn from the bank — double the amount previously paid out — as part of a special agreement struck to cover 2019 and 2020.

The SNB’s outsize foreign equity investments — which alone made it SFr32bn last year — are held as part of its efforts to hold down the value of the franc.

Included in the SNB’s portfolio is a SFr3.4bn position in Apple, SFr2.4bn in Microsoft and SFr1.3bn in Amazon.

The franc is under strong pressure to appreciate thanks to Switzerland’s status as a safe haven popular with investors around the world.

Policymakers at the SNB believe a rise in the franc’s value will do significant damage to the Swiss economy.

Switzerland also has the world’s lowest interest rates — held at minus 0.75 per cent for the last five years — as a result.