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SNB Reduced Loss from 50 Billion in June to 23 Billion

According to the latest news release, the Swiss National Bank expects an annual loss of 23 billion CHF, after reporting a loss of 50 billion at the end of June. Primarily thanks to the stronger dollar, the SNB was able to achieve unrealized gains of 27 billion CHF in the second half. This reduced her annual loss to 23 billion. With its rate hike, Fed is helping the SNB: the dollar has appreciated by 6% since July.

Balance Sheet

The SNB balance sheet looks as follows. In this post we concentrate on liabilities and owner’s equity (latest data here)

Balance Sheet SNB Simplified2

For an overview of the assets see here.


SNB liabilities have two important components:

Owner’s Equity: The real reserves for the SNB are the owners’ equity. The SNB is a public company (symbol SNBN:SW)
Changes in FX markets contribute most to movements in SNB profit & loss and in owners’ equity.

Sight Deposits:  In times of low inflation the principal mean of financing interventions.


Latest update

The full SNB release is here.

The latest SNB balance sheet data show that the Fed is helping the Swiss National Bank. The Fed is moving towards a rate hike, and consequently the dollar is appreciating. Primarily thanks to the stronger dollar, the SNB was able to achieve unrealized gains of 27 billion CHF since July.

Still one should remember that all these gains are paper gains. For two reasons one should be suspicious:

  1. A big speculative position dollar against CHF is building up.
  2. The SNB continues to intervene. Buying dollars is currently not useful, because the SNB would sell them a lower price. We remember that the summer 2011 interventions were focused on the dollar at around 0.80 CHF.

The following table gives an overview of the balance sheet, with focus on liabilities, owner’s equity and interventions.

Year/QuarterTotal LiabilitiesOwner's Equity (&provisions)FX TrendsEUR/CHFUSD/CHFGold (in CHF)SNB InterventionsSNB results in periodMajor driver of results
November 2015635 bln. CHF68.9 bln.Spec. pos. against CHF rising1.08401.0111151 bln. CHFGain: 10 bln
USD stronger
October 2015621 bln. CHF58.1 bln.Fed moves towards rate hike1.08730.98801127
2 bln. CHFGain: 7.4 bln
USD stronger
Q3/2015613 bln. CHF50.4 bln.Speculative pos. against CHF building1.08770.97321107
5 bln. CHFGain: 16 bln
USD & EUR stronger
Q2/2015577 bln.34.2 bln.Greek crisis1.04190.9355108815 bln CHFLoss: 22 bln. European stocks & US Treasuries
Q1/2015581 bln. 56 bln.Draghi QE leads to end of EUR/CHF peg1.04370.97261168

67 bln. CHFLoss: 30 bln.
High loss on EUR
Q4/2014561 bln. 86 bln.Rouble crisis trigger new SNB interventions1.20290.9942117920 bln. CHF Gain: 10 bln.
Most on USD
Q3/2014522 bln.76 bln. Oil price starts collapse1.20670.95521139NoneGain: 12 bln.
USD, GBP stronger
Q2/2014508 bln.64 bln. Draghi talks of QE1.21430.88691171NoneGain: 12 bln.all types of assets: gold, bonds, stocks
Q1/2014495 bln.52.3 bln. Ukraine crisis1.21840.88471153NoneGain: 4 bln.
2013490 bln.48 bln.Fed ending Quantiative Easing1.22760.89311107
NoneLoss: 10 bln.Heavy losses on gold
2012499 bln.58 bln.Massive SNB interventions1.20400.92051528
160 bln. CHFGain: 5 bln.Gains on gold and equities.
2011346 bln.53 bln.EUR/CHF peg introduction,1.250.94421640
Focus on USD interventionGain: 10 bln.Strong gains on gold
2010270 bln.43 bln.EUR falls from 1.40 to 1.24. 1.20400.93401246
interventions until April 2010Loss: 23 bln.
Gold reduced FX loss
2009207 bln.66 bln.Rising JPY, Falling USD after QE 1.48371.03541121
interventions with sight deposits and swapsGain: 8 bln.Gains on swaps, treasuries
2008214 bln.58 bln.Falling USD with sub prime crisis. EUR unchanged1.48501.0673989
interventions with swapsLoss: 7 bln.Loss on USD
2007126 bln.65 bln.Subprime crisis: EUR and USD start falling vs. CHF1.65471.13291046
NoneGain: 5 bln.Gains on swaps, treasuries
2006112 bln.60 bln.1.60821.2265800


June 2015:

The SNB lost 23 bln. of owners’ equity.
Falling prices of the bonds and stocks porfolio let to further losses. Two examples:

  1. the yield of 5 Year US Treasuries fell from 1.37% at end March to 1.61% at the end of June. This implied falling bond prices.
  2. The German DAX fell from over 12000 points still in April to 10944 at the end of June.

May 2015:

A loss of 1.5% in euro and Canadian dollar and falling bond prices let to another loss of 8 billion Francs in owners’ capital.


The Stronger Dollar Helped in 2014

The EUR fell from 1.38$ in Q2/2014 to 1.24$ in Q3/2014 and close to 1.10$ in Q4. During the times of the peg, it implied that the USD/CHF improved similarly, from 0.87 in March 2014 to 0.89 in Q2/2014, 0.95 in Q3 and to parity at the end of 2014. The stronger US Dollar helped to increase the value of the SNB assets and of the whole balance sheet.

Between the first and the third quarter of 2014, the SNB did not intervene. Thanks to the stronger dollar and the peg to the euro, the owners’ equity rose and let to the very good 2014 results of 38 billion CHF. However, the losses until end May amount to 46 billion, more than the profit of 2014.

The SNB had to intervene again, with the Russia crisis in November/December. When European QE was looming in January, the SNB decided to exit from the peg.




George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com 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.
See more for 1.) SNB, George Dorgan's opinion

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