Interim results of the Swiss National Bank as at 31 March 2010

The continued rise in the gold price resulted in a valuation gain of CHF 1.3 billion, while a loss of CHF 0.9 billion was recorded on foreign currency positions. The stabilisation fund contributed CHF 0.9 billion to the consolidated result.

Impact of gold price and exchange rate developments
As at the end of March 2010, the SNB’s gold holdings were valued at CHF 37,905 per kilogram (+3.3%). This led to a valuation gain of CHF 1,267 million (Q1 2009: CHF 4,036 million). Exchange rates became the decisive factor in the result on foreign currency positions. An exchange-rate-related loss of CHF 2,911 million resulted from investments in the euro, which finished the quarter 3.8% below its level three months earlier. This was partly offset by exchange-rate-related gains of CHF 660 million on US dollar positions (2.3% USD appreciation). Overall, exchange rate effects reduced the foreign currency positions result by CHF 2,426 million.

On the other hand, interest income contributed CHF 734 million, and dividend income a further CHF 28 million. Price gains on fixed-income securities amounting to CHF 556 million and on equity securities amounting to CHF 258 million also compensated in part for the exchange rate losses. Overall, losses on the foreign currency positions came to CHF 872 million in the first quarter of 2010 (Q1 2009: CHF +1,312 million). The net result of CHF 112 million from Swiss franc investments (Q1 2009: CHF 7.1 million) was primarily made up of price gains amounting to CHF 70 million and CHF 48 million in interest income from bonds.

Stabilisation fund remains on track
In the period under review, the sale of investments netted USD 1.1 billion and the SNB’s loan to the stabilisation fund was reduced by USD 2.6 billion to USD 17.7 billion. In the first quarter of 2010, the stabilisation fund benefited from an improved market environment. It ended the quarter with a profit of USD 1,326 million. Thanks to this positive result, the secondary loss protection – a conditional option (warrant) to purchase 100 million UBS shares at a nominal value of CHF 0.10 per share, which can be exercised if the loan is not repaid in full – is currently no longer being used. Consequently, the use made of the warrant as at the end of the year 2009 (CHF 482 million) has been reversed.

Overall, the stabilisation fund contributed CHF 921 million to the SNB’s group profit. This amount is equivalent to the stabilisation fund’s equity and is available as the primary loss protection to cover future losses.

Interim result and establishment of provisions
Together with other income and expenses, a quarterly profit of CHF 1,505 million was achieved before allocation to provisions (Q1 2009: CHF 4,830 million). In accordance with art. 30 para. 1 of the National Bank Act (NBA), the SNB is required to set aside provisions permitting it to maintain the currency reserves at the level necessary for monetary policy. A total of CHF 3,902 million is to be allocated for the current financial year as a whole, or CHF 975 million for the quarter under review.

Contact
Swiss National Bank P.O. Box CH-8022 Zürich Telephone 044 631 31 11 Fax 044 631 39 10

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