World Economy

SNB Suffers $51b Loss

SNB Suffers $51b LossSNB Suffers $51b Loss

The Swiss National Bank has reported a record half-year loss. The lender said the sharp drop was mainly attributable to its strong national currency after a move to scrap the franc’s cap against the euro.

Switzerland’s central bank announced Friday it had suffered a loss of 50.1 billion francs ($51 billion) in the first half of the year, down on the 16.1 billion francs in profit logged for the same period a year earlier, DW reported.

The Swiss National Bank said the poor performance was primarily due to its January 15 decision to abandon the minimum rate of 1.20 francs to a euro, leading to losses on its foreign currency assets.

Scrapping that cap amounted for 47.2 billion francs in losses, the lender explained, with another 3.2 billion francs lost on its gold reserves due to falling prices for the precious metal.

The central bank warned it might not be able to share any profits with the nation’s government this year if results did not improve in the second half of 2015.

But despite the massive loss incurred in the first six months of the year, the SNB indicated the situation would not have to be equally dismal for the rest of 2015.

It pointed to strong fluctuations in its financial results depending largely on developments in the gold, foreign exchange and capital markets.

“Only provisional conclusions are possible as regards the annual result, the bank said in a statement on Friday.