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Swiss National Bank Results Q3 / 2016: Volatility of Results is Increasing

The increasing volatility of SNB Results

The last  formulation gives the impression that the annual results are definite. But the SNB may lose 50 billion in one year and win 60 billion in the next year or the opposite.





Interim results of the Swiss National Bank as at 30 September 2016


The Swiss National Bank (SNB) reports a profit of CHF 28.7 billion for the first three quarters of 2016.

A valuation gain of CHF 7.5 billion was recorded on gold holdings. The profit on foreign currency positions amounted to CHF 20.3 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.

Income statement, 1 January–30 September 2016

Income statement, 1 January–30 September 2016

. - Click to enlarge

Profit on foreign currency positions

The net result on foreign currency positions amounted to CHF 20.3 billion.

Interest Income:

  • Interest income accounted for CHF 6.2 billion
  • dividends for CHF 2.4 billion.

Gains on bonds

“The generally lower interest rate level resulted in price gains of CHF 10.0 billion on interest-bearing paper and instruments.”

Gains on Equities:

“Equity securities and instruments benefited from the favourable stock market  environment and contributed CHF 5.1 billion to income. Overall, exchange rate-related losses amounted to CHF 3.4 billion.”

SNB results Q3 2016
(in bn CHF)
Profit BalanceSheet Profit in %
Total Profit on foreign currencies 20.3 720.3 2.81%
Interest income(coupons) 6.2 720.3 0.86%
Dividend income 2.4 720.3 0.33%
Price changes in bonds 10.0 720.3 1.38%
Price changes in equities 5.1 720.3 0.70%
Exchange Rate Losses -3.4 720.3 -0.47%

Income statement, 1 January–30 September 2016

Income statement, 1 January–30 September 2016

. - Click to enlarge

Results Q3 / 2016

The following table shows that the result in Q3/2016 was not that good as in the same quarter last year

SNB Results Q3/2016: Minus 9 Billion CHF

Income Statement for the Third Quarter of 2016, SNB Results Q3/2016: Minus 9 Billion CHF

. - Click to enlarge

SNB Window Dressing at the End of Q3?

We supposed that the SNB was window-dressing at the end of Q3, because on September 30, the EUR/CHF improved considerably.

This would imply that the results will be worse in Q4, given that the EUR/CHF has fallen to 1.0780 – unless they do window-dressing again.


EUR/CHF, September 30

EUR-CHF - Euro Swiss Franc, September 30, 2016


Valuation gain on gold holdings

“A valuation gain of CHF 7.5 billion was achieved on gold holdings, which in volume terms have remained unchanged. Gold was trading at CHF 41,275 per kilogram at end-September  2016 (end-2015: CHF 34,103).”

SNB Results H1/2017
(in bn CHF)
Profit Balance Sheet Profit in %
Total Profit on Gold………………………….. 7.5 720.3 1.04%

Percentage of gold to balance sheet

The percentage of gold compared to the total balance sheet is rising.

SNB Balance Sheet items
(in bn CHF)
Q3 2016
Gold……………………………………… 42.9 35.5
Total Balance Sheet 720.3 640
Gold in % of Balance Sheet 5.95% 5.54%


Balance Sheet

The balance sheet has risen by over 80.3 bn. francs by 12.54%.

Q3/2016 2015 Increase in %
SNB balance sheet in CHF………………. 720.3 640 3.82%
Swiss GDP in CHF 650 645 0.92%
% of GDP 118.14% 114,85%

SNB Balance Sheet for Gold Holdings, Q3 2016

SNB Balance Sheet for Gold Holdings, Q3 2016

- Click to enlarge

SNB Liabilities

Sight deposits: The delta namely

51.1 – 5.6 + 2.1 bn. =47.8 bn CHF

shows exactly, how much the SNB has intervened.

Banknotes in circulation: Nearly unchanged.

“Provisions for currency reserves”.Like any provision the central bank can manipulate.

Essentially the SNB claims that 58 billion CHF out of the 88.76 total equity are “at risk”.

For now, it counters the 23.25 billion losses of 2015 with a gain of 28.7 billion interim results in 2016. This gives implicitly the results over two years time and answers the question in the beginning.

Q3 2016 2015 Change in%
Total Sight Deposits 518.3 530 -2.20%
Balance Sheet 720.3 640 12.54%
% of balance sheet 72.0% 82.8%



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 2016 will be  determined at the end of the year

SNB Liabilities and Sight Deposits, Q3 2017

(see more posts on SNB sight deposits, )
SNB Liabilities and Sight Deposits, Q3 2017

- Click to enlarge


George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
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