SNB expects 24 billion Swiss francs profit for 2016

Switzerland's central bank expects a 2016 full-year profit of 24 billion francs ($23.6 billion), it said on Monday; the results were largely down to foreign currency holdings built up to weaken the strong Swiss franc and its negative interest rate policy.

Profit from foreign currency positions amounted to more than CHF19 billion, the SNB added in the statement while a valuation gain of CHF3.9 billion was also recorded on gold holdings. Last year’s result is set to be the second-best in the last decade and follows a record loss for 2015.

The bank has built up foreign currency reserves by selling francs and buying foreign currency to weaken the franc, which it has consistently described as "significantly overvalued".

A strong franc makes life more difficult for Switzerland's exporters by making their products more expensive outside the country.

The SNB is not required to make a profit, with its main mandate to ensure price stability in Switzerland. But a portion of any profit it does make is distributed to the Swiss government and the country's 26 cantons. The SNB said it would pay its usual dividend, to the federal government and cantons, of 1 billion francs.

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