Swiss central bank hard hit by gold price fall
Switzerland's central bank said on Monday that it lost billions in 2013 amid a sharp drop in gold prices and that it therefore would not pay dividends to Bern or the Swiss cantons.
Geneva: Switzerland's central bank said on Monday that it lost billions in 2013 amid a sharp drop in gold prices and that it therefore would not pay dividends to Bern or the Swiss cantons.
The Swiss National Bank (SNB) said it expected to report a loss of 9 billion Swiss francs in 2013, according to provisional figures.
But it had lost far more on the value of its gold holdings, which shed 15 billion francs during a year when prices for the precious metal dropped by 28 percent.
That deep loss was offset though by gains of 3 billion Swiss francs on the banks foreign currency positions, and another increase of 3 billion on a stabilisation fund it put in place in 2008 to save Switzerland's largest bank, UBS, from collapse.
But since SNB needed to put aside 3 billion Swiss francs as a provision for its currency reserves, it said it expected to end up about 12 billion francs in the red.
"As this loss will be substantially larger than the 5.3 billion Swiss francs in the distribution reserve, the SNB cannot make a profit distribution," the bank explained.
Switzerland's central bank usually hands out dividends to the Swiss Confederation and regional cantons.
Last year, BNS reported a 6.9-billion-franc profit and redistributed 2.4 billion francs of its profit to the Swiss Confederation, cantons and other share holders.
The bank is set to announce its full results on March 7.