Swiss National Bank posts 39 billion franc Q2 profit

The Swiss National Bank posted a profit of 39 billion Swiss francs ($43 billion) during its second quarter, it said on Friday, as a stock market rally boosted the value of its foreign currency investments.

The central bank made a profit of 34.4 billion francs from its foreign currency positions during the quarter, which included dividends and valuation gains on its stocks as well as interest payments and a higher value of its bond holdings.

The performance improved the SNB's position after a 38.2 billion franc loss during its first quarter. For the first half of 2020 it made a profit of 0.8 billion francs.

"The first half of 2020 was dominated by the effects of the coronavirus pandemic, which led to high volatility on the financial markets," the central bank said in a statement, noting its results depend largely on market developments.

"Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result."

The central bank made a valuation gain of 4.3 billion francs from its gold holdings during the second quarter, while it also made a small profit from its Swiss franc positions, mainly the negative interest rates it charges commercial banks.

Although making a profit is not part of the SNB's mandate, Switzerland's federal and regional governments appreciate the payout it makes, which increased to 4 billion francs this year.

Despite the second quarter profit, current volatility makes it difficult to say if the SNB will post a profit for the full year, analysts said. ($1 = 0.9068 Swiss francs)