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ZURICH, October 29 (Reuters) – Swiss National Bank SNBN.S posted a loss of 2.075 billion francs in its third quarter, the central bank reported on Friday, as profits from its bond holdings and negative interest rates failed to cover losses from the weakening of the stock markets. and the Swiss franc stronger.
The SNB, which holds 23% of its CHF 957 billion in foreign currency assets in equities, reported a loss of CHF 2.354 billion on its foreign currency positions in the three months ending late September .
The MSCI index of world prices for all countries .MIWD00000PUS fell 1.7% in the quarter as concerns over supplier bottlenecks, energy supplies and inflation weighed on businesses and markets.
The SNB made a profit of 109.5 million Swiss francs on a capital gain on its gold holdings, while it made a profit of 250 million francs on its positions in Swiss francs, mainly the rates of negative interest it charges commercial banks for parking money overnight.
Interest and dividend income in the first nine months amounted to CHF 5.5 billion and CHF 2.9 billion respectively, while bond price losses of 13.7 billion were recorded. because fixed income investments have lost value and yields have increased.
SNB shares gained 22.2 billion francs in value, the SNB said, although the gain was wiped out by 25.3 billion francs in exchange-related losses due to the strengthening of the Swiss franc.
“The SNB lost money to falling bond valuations and the weakening stock market, but the outcome would have been even worse without the contribution of negative interest rates, dividend payments on shares it owns and interest payments on bonds, âsaid UBS economist Alessandro Bee. .
“The gains from the weakening of the franc against the dollar were more or less offset by the rise of the currency against the euro.”
Still, the loss would not be too serious for the central bank, which posted a profit of 43.5 billion francs in the first half of the year.
With a distribution reserve of 90.943 billion francs, the central bank should still be able to pay the Swiss government a maximum payout of 6 billion francs for 2021, Bee said.
(Reporting by John Revill and Riham Alkousaa; editing by Brenna Hughes Neghaiwi)
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