(Bloomberg) — Switzerland’s central bank swung to a loss as a slump in the dollar caused by Donald Trump’s tariff policies dented its large foreign-currency portfolio.
Results for the first six months of the year showed a loss of 15.3 billion francs ($19 billion) on Thursday, the Swiss National Bank said in a statement on Thursday.
That compares with a 6.7 billion-franc profit in the first quarter and is in line with an estimate from UBS Group AG, where economists predicted a 10-20 billion-franc shortfall.
The SNB’s asset hoard, usually the top earner, yielded a loss of 22.7 billion francs. That couldn’t be offset by a valuation gain of 8.6 billion francs on the institution’s gold holdings, which are traded in dollars. The greenback depreciated more than 10% against the Swiss currency in the three months through June, driven by the US president’s tariff policies and the franc’s appeal as a haven.
The central bank also saw losses of 1 billion from positions in Swiss francs, mainly because it had to pay interest on deposits of commercial banks. After policymakers cut borrowing costs to zero last month, these expenses are set to disappear in coming quarters.
UBS economists Alessandro Bee and Florian Germanier warned ahead of the results that a half-year shortfall could threaten the SNB’s ability to make a payout to the government and cantons for 2025. That already was the case for 2022 and 2023, when annual distributions were skipped due to losses linked to the institution’s outsized balance sheet.
The SNB’s assets have triggered international warnings. Its balance sheet ballooned because of years of asset purchases to weaken the franc — though the central bank has largely refrained from such moves more recently. As of last month, foreign-currency reserves stood at 713 billion francs.
Due to the volatility of financial markets against the current geopolitical backdrop, the UBS economists refused to make a call whether the SNB will manage to make a profit — and therefore a payout — for 2025.
SNB earnings are calculated by comparing asset prices at the start and end of each period. Interim announcements therefore have little bearing on the central bank’s result for the full year.
The numbers also have no link to Swiss monetary policy. Nine-month earnings are due on Oct. 31.
–With assistance from Kristian Siedenburg.
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