The Swiss National Bank (SNB) has announced a preliminary profit of CHF 80 billion for 2024, marking a historic moment in Switzerland’s financial history. Driven by substantial gains in foreign currency investments and gold valuations, this achievement highlights the SNB’s strategic acumen in navigating global financial volatility. As one of the highest profits in recent years, this windfall underscores the bank’s critical role in maintaining Switzerland’s economic stability.
Sources of Profit
The SNB’s record-breaking profit stems from several key areas:
1. Foreign Currency Gains: CHF 67 Billion
The SNB’s strategic investments in foreign currency holdings contributed the lion’s share of the profit. Diversified portfolios capitalized on favorable global market conditions, showcasing the bank’s effective management of international reserves.
2. Gold Valuation Gains: CHF 21.2 Billion
Rising gold prices provided a significant boost to the SNB’s bottom line. As a traditional hedge against inflation and economic uncertainty, gold remains a cornerstone of the SNB’s reserve strategy.
3. Swiss Franc Positions: CHF 7.4 Billion Loss
Despite overall success, the SNB recorded a CHF 7.4 billion loss on its franc-denominated positions, reflecting the challenges of managing currency fluctuations. These losses, however, were outweighed by gains in other areas, ensuring a robust financial outcome.
Allocation of Profit
The SNB’s profit has been strategically allocated to ensure long-term stability and benefit the Swiss public:
1. Provisions for Currency Reserves: CHF 11.6 Billion
This allocation strengthens the SNB’s buffer against future economic uncertainties. Currency reserve provisions are essential for safeguarding Switzerland’s financial system.
2. Dividend Payout: CHF 15 per Share
Shareholders will receive the maximum legally permitted dividend, underscoring the SNB’s commitment to delivering value.
3. Distribution to Confederation and Cantons: CHF 3 Billion
In accordance with the 2021 agreement with the Federal Department of Finance, CHF 3 billion will be distributed, with one-third allocated to the Confederation and two-thirds to the cantons. This injection of funds will bolster public finances, supporting infrastructure, healthcare, and other essential services.
4. Replenishment of Distribution Reserve: CHF 13 Billion
Post-distribution, the SNB’s distribution reserve will stand at CHF 13 billion, reinforcing its ability to sustain future payouts.
What This Means for Switzerland
Economic Stability and Growth
The CHF 80 billion profit cements the SNB’s reputation as a stabilizing force in Swiss and global finance. The bank’s ability to generate significant returns amidst a volatile economic environment demonstrates its strategic resilience.
Public Finance Benefits
The CHF 3 billion distribution to the Confederation and cantons will directly enhance public budgets. These funds can be allocated to critical areas such as infrastructure projects, education, and healthcare, benefiting Swiss citizens across the country.
Investor Confidence
The dividend payout of CHF 15 per share signals strong financial health, boosting investor trust in Switzerland’s economic stability. It also reaffirms the SNB’s capability to balance public and shareholder interests effectively.
A Forward-Looking Perspective
While this preliminary announcement offers a glimpse into the SNB’s exceptional year, more detailed insights will be available in the upcoming reports:
- Annual Result Report: Released on 3 March 2025.
- Full Annual Report: Published on 18 March 2025.
This historic profit not only reflects past achievements but also sets a positive trajectory for the SNB and the Swiss economy. As the global financial landscape evolves, the SNB’s commitment to stability, transparency, and strategic foresight remains unwavering.
Conclusion
The Swiss National Bank’s CHF 80 billion profit for 2024 represents a landmark achievement in central banking. Through prudent investments, effective management, and strategic allocations, the SNB continues to play a pivotal role in strengthening Switzerland’s economy. This historic performance is not just a financial milestone but a testament to the resilience and foresight of Switzerland’s financial system.
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