Swiss National Bank Sees Profit Soar on Equity Market Rally

The Swiss National Bank (SNB) has reported a significant increase in quarterly profits due to rising equity markets. In the second quarter, the SNB made a profit of 25.7 billion Swiss francs ($31.84 billion), reversing a loss of 22 billion francs from the same period last year and beating UBS forecasts for a profit of 19 billion to 24 billion Swiss francs.

The SNB's profits were largely driven by its foreign currency positions, which generated a gain of 39.9 billion francs between April and June. This was due in part to the MSCI World Index gaining 13% during the same period, as markets rallied in the US and Europe following accelerating investment in AI and reduced fears about the Iran war.

However, the SNB did incur a loss of 14.1 billion francs on its gold holdings, which represented the falling value of the 1,040 tonnes of gold it holds. Gold lost 14% in value during the second quarter due to higher US interest rates and a stronger dollar.

According to UBS economist Florian Germanier, the SNB's results are influenced by its large balance sheet, which causes wide swings in its profits.