Schweizerische Nationalbank : Interim results of the Swiss National Bank as at 30 September 2019

Press release

Communications

P.O. Box, CH-8022 Zurich Telephone [phone] [e-mail]

Zurich, 31 October 2019

Interim results of the Swiss National Bank as at 30 September 2019

The Swiss National Bank reports a profit of CHF 51.5 billion for the first three quarters of 2019.

The profit on foreign currency positions amounted to CHF 42.7 billion. A valuation gain of CHF 7.3 billion was recorded on gold holdings. The profit on Swiss franc positions was CHF 1.7 billion.

The SNB's financial result depends largely on developments in the gold, foreign exchange and capital markets. Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result.

Profit on foreign currency positions

The profit on foreign currency positions amounted to CHF 42.7 billion.

Interest and dividend income totalled CHF 6.9 billion and CHF 2.9 billion respectively. A gain of CHF 19.5 billion was recorded on interest-bearing paper and instruments. Furthermore, the favourable stock market environment led to a gain of CHF 22.4 billion on equity securities and instruments. Exchange rate-related losses totalled CHF 8.9 billion.

Valuation gain on gold holdings

A valuation gain of CHF 7.3 billion was recorded on gold holdings, which remained unchanged in volume terms. Gold was trading at CHF 47,620 per kilogram at end-September 2019 (end-2018: CHF 40,612).

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Zurich, 31 October 2019

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Profit on Swiss franc positions

The profit on Swiss franc positions totalled CHF 1.7 billion. It largely resulted from negative interest charged on sight deposit account balances.

Provisions for currency reserves

As at the end of September 2019, the SNB recorded a profit of CHF 51.5 billion before allocation to the provisions for currency reserves.

In accordance with art. 30 para. 1 of the National Bank Act (NBA), the SNB is required to set aside provisions permitting it to maintain the currency reserves at the level necessary for monetary policy. The allocation for the current financial year is determined at the end of the year.

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Zurich, 31 October 2019

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Income statement, 1 January-30 September 2019 1

In CHF millions

	Item		Q1-Q3 2019		Q1-Q3 2018		Change
	in Notes
Net result from gold		7	287.6		- 3 728.6		+ 11 016.2
Net result from foreign currency
positions	1	42	738.4		- 5 266.9		+ 48 005.3
Net result from Swiss franc positions	2	1	738.7	1 458.7		+ 280.0
Net result, other				0.2		- 5.0		+ 5.2
Gross income		51	764.9		- 7 541.8		+ 59 306.7
Banknote expenses				- 47.2		- 45.2		- 2.0
Personnel expenses			- 132.7		- 129.6		- 3.1
General overheads				- 92.0		- 89.2		- 2.8
Depreciation on tangible assets				- 23.4		- 20.0		- 3.4
Interim result		51	469.6		- 7 825.8		+ 59 295.4

1 Unaudited. The external auditors only audit the annual financial statements.

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Zurich, 31 October 2019

Press release

Income statement for the third quarter of 2019 1

In CHF millions

	Q3 2019		Q3 2018		Change
Net result from gold	3	509.6		- 2 796.3		+ 6 305.9
Net result from foreign currency positions	8	978.7		- 10 510.1		+ 19 488.8
Net result from Swiss franc positions		598.2	470.4		+ 127.8
Net result, other		8.1		- 4.1		+ 12.2
Gross income	13	094.5		- 12 840.1		+ 25 934.6
Banknote expenses		- 10.8		- 22.2		+ 11.4
Personnel expenses		- 43.4		- 43.1		- 0.3
General overheads		- 26.8		- 29.4		+ 2.6
Depreciation on tangible assets		- 8.3		- 6.6		- 1.7
Interim result	13	005.2		- 12 941.4		+ 25 946.6

1 Unaudited. The external auditors only audit the annual financial statements.

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Zurich, 31 October 2019

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Balance sheet as at 30 September 2019 1

Assets

In CHF millions

	30.09.2019		31.12.2018		Change
Gold holdings	49	524.9	42	237.3		+ 7 287.6
Foreign currency investments2	797	782.3	763	727.9		+ 34 054.4
Reserve position in the IMF	1	308.4	1	188.4		+ 120.0
International payment instruments	4	421.6	4	440.6		- 19.0
Monetary assistance loans		244.8			260.3		- 15.5
Claims from Swiss franc repo transactions		-			-		-
Swiss franc securities	4	149.0	3	977.1		+ 171.9
Tangible assets		440.9			435.5		+ 5.4
Participations		154.6			151.0		+ 3.6
Other assets		868.0			650.7		+ 217.3
Total assets	858	894.6	817	068.8		+ 41 825.8

1 Unaudited. The external auditors only audit the annual financial statements.

2 Includes, as at end-September 2019, cash received from repo transactions relating to the management of foreign currency investments amounting to CHF 11.6 billion (end-2018: CHF 34.8 billion). The associated liabilities are included in the balance sheet under foreign currency liabilities and result in a balance sheet expansion.

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Liabilities

In CHF millions

	30.09.2019		31.12.2018		Change
Banknotes in circulation	79	696.9	82	238.8		- 2 541.9
Sight deposits of domestic banks	479	365.3	480	634.3		- 1 269.0
Liabilities towards the Confederation	27	604.7	15	612.6		+ 11 992.1
Sight deposits of foreign banks and institutions	50	192.2	37	101.7		+ 13 090.5
Other sight liabilities	35	899.0	41	478.6		- 5 579.6
Liabilities from Swiss franc repo transactions		-			-		-
SNB debt certificates		-			-		-
Foreign currency liabilities	11	648.1	34 811.8		- 23 163.7
Counterpart of SDRs allocated by the IMF	4	461.8	4	486.5		- 24.7
Other liabilities		326.1			472.2		- 146.1
Equity
Provisions for currency reserves1	73	216.3	67	792.9		+ 5 423.4
Share capital		25.0			25.0		-
Distribution reserve2	44	989.5	67	348.4		- 22 358.9
Annual result 2018				- 14 934.0		+ 14 934.0
Interim result	51	469.6					+ 51 469.6
Total equity	169	700.4	120	232.3		+ 49 468.1
Total liabilities	858	894.6	817	068.8		+ 41 825.8

• The allocation to the provisions for currency reserves forms part of the profit appropriation. The increase of around CHF 5.4 billion represents the allocation for the 2018 financial year.

2 The distribution reserve only changes once a year, as part of the profit appropriation.

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Condensed changes in equity

In CHF millions

	Q1-Q3 2019		Q1-Q3 2018
Equity at beginning of period1	120	232.3	137	167.8
Distribution of dividends to shareholders		- 1.5			- 1.5
Profit distribution to Confederation and cantons	- 2 000.0		- 2 000.0
Interim result	51	469.6		- 7 825.8
Equity at end of period	169	700.4	127 340.6

1 At the beginning of the period, equity is composed of share capital, provisions for currency reserves, the distribution reserve and the annual result.

Valuation rates

			Year under review					Previous year
	30.09.2019		31.12.2018		Change	30.09.2018		31.12.2017		Change
	CHF		CHF		In percent	CHF		CHF		In percent
1 EUR	1.0864	1.1283		- 3.7	1.1313	1.1711		- 3.4
1 USD	0.9965	0.9868		+ 1.0	0.9769	0.9765		0.0
100 JPY	0.9226	0.8969		+ 2.9	0.8608	0.8678		- 0.8
1 GBP	1.2271	1.2630		- 2.8	1.2709	1.3205		- 3.8
1 CAD	0.7524	0.7232		+ 4.0	0.7535	0.7775		- 3.1
1 kilogram
of gold	47 619.68	40 612.43		+ 17.3	37 274.14	40 859.28		- 8.8

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Appendix

Accounting and valuation principles

The SNB is a special-statutejoint-stock company with head offices in Berne and Zurich. These interim results have been drawn up in accordance with the provisions of the NBA and the Swiss Code of Obligations (CO) as well as the accounting principles detailed in the notes to the annual financial statements as at 31 December 2018. These results present a true and fair view of the financial position and the results of operations of the SNB. Unless otherwise stated, the accounting principles are based on the Swiss GAAP FER standards (Accounting and Reporting Recommendations). Departures from Swiss GAAP FER occur only if an accounting principle runs counter to the provisions of the NBA or if the special nature of the SNB needs to be taken into account. In a departure from Swiss GAAP FER, no cash flow statement has been prepared. The structure and designation of the items in the balance sheet and the income statement take into consideration the special character of the business conducted at a central bank.

Compared with the annual financial statements as at 31 December 2018, there were no changes to the accounting and valuation principles.

The SNB interim results as at 30 September 2019 constitute an interim report in accordance with Swiss GAAP FER 31, with condensations in presentation and disclosures.

Swiss GAAP FER 31 requires the presentation of earnings per share. This has no informative value in view of the special statutory provisions for the SNB. Shareholders' rights are determined by the NBA and their dividends, in particular, may not exceed 6% of share capital (with a nominal value of CHF 250 per share, a maximum of CHF 15); the Confederation is entitled to one-third and the cantons to two-thirds of the remaining distributable profit. Therefore, no presentation of earnings per share is made.

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Notes to the balance sheet and income statement

Item no. 1: Net result from foreign currency positions

Breakdown by origin in CHF millions

	Q1-Q3 2019		Q1-Q3 2018		Change
Foreign currency investments	42	734.0			- 5 252.9		+ 47 986.9
Reserve position in the IMF		- 0.9		- 17.2		+ 16.3
International payment instruments		- 0.3	2.4			- 2.7
Monetary assistance loans		5.6		0.8			+ 4.8
Total	42	738.4			- 5 266.9		+ 48 005.3
Breakdown by type in CHF millions
	Q1-Q3 2019			Q1-Q3 2018			Change
Interest income	6	944.5		7 191.1			- 246.6
Price gain/loss on interest-bearing
paper and instruments	19	485.5			- 8 520.8		+ 28 006.3
Interest expenses		- 75.0	6.8			- 81.8
Dividend income	2	908.1		2 699.8			+ 208.3
Price gain/loss on equity securities and instruments	22	381.5		8 167.8			+ 14 213.7
Exchange rate gain/loss	- 8 879.4		- 14 782.7		+ 5 903.3
Asset management, safe custody and other fees		- 26.9		- 28.9		+ 2.0
Total	42	738.4			- 5 266.9		+ 48 005.3

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Item no. 2: Net result from Swiss franc positions

Breakdown by origin in CHF millions

	Q1-Q3 2019		Q1-Q3 2018		Change
Negative interest on sight deposit account balances	1 528.2		1 528.4			- 0.2
Swiss franc securities	211.6			- 67.8		+ 279.4
Liquidity-providing Swiss franc repo transactions	-		-		-
Liquidity-absorbing Swiss franc repo transactions	-		-		-
Liabilities towards the Confederation	-		-		-
SNB debt certificates	-		-		-
Other Swiss franc positions	- 1.1		- 1.8		+ 0.7
Total	1 738.7		1 458.7			+ 280.0
Breakdown by type in CHF millions
	Q1-Q3 2019			Q1-Q3 2018			Change
Negative interest on sight deposit account balances	1 528.2		1 528.4			- 0.2
Interest income	33.9		37.6			- 3.7
Price gain/loss on interest-bearing
paper and instruments	183.0			- 98.4		+ 281.4
Interest expenses	- 1.1		- 1.8		+ 0.7
Trading, safe custody and other fees	- 5.4		- 7.0		+ 1.6
Total	1 738.7		1 458.7			+ 280.0

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