ZURICH, Jan 7 (Reuters) - The Swiss National Bank expects to
make a profit of around 26 billion Swiss francs ($28.22 billion)
for 2021, the central bank said in its provisional results on
Friday, as booming stock markets throughout the year added
billions to the value of its foreign currency investments.
The SNB made a profit of just under 26 billion francs on its
foreign currency positions, which include nearly 1 trillion
francs worth of stocks and bonds bought during its long campaign
to weaken the Swiss franc.
The central bank suffered a valuation loss of 100 million
francs from its gold holdings, offset by a 1 billion franc
profit from its Swiss franc positions, mainly the negative
interest rates it charges commercial banks to hold money
overnight.
As a result, its annual profit is expected to be higher than
the 20.9 billion francs profit it made for 2020.
The performance means the SNB will pay an unchanged dividend
of 15 francs per share, the legal maximum. It will also make a
maximum payout of 6 billion francs to the Swiss government and
regional authorities under a new agreement signed last year.
The SNB will release final profit figures in March.
It gave no details of its fourth-quarter performance, where
the appreciation of the Swiss franc likely reduced the valuation
gains from its foreign currency investments.
The franc rose against both the euro and dollar
between October and December, hitting its highest level
against the common currency since mid-2015.
This currency movement will have reduced gains from higher
stock values when translated back to francs.
Still, UBS economist Alessandro Bee reckoned the SNB's share
portfolio gains more than compensated for the higher value of
the franc.
Bee estimated the central bank made a valuation gain of
roughly 35 billion francs in 2021 from its stock market
holdings, which includes stakes in Starbucks, Apple
and other U.S. tech giants.
($1 = 0.9212 Swiss francs)
(Reporting by John Revill
Editing by Riham Alkousaa and Michael Shields)