SNB records $1.3bn profit for first quarter

The Swiss National Bank recorded a profit of Sfr1.5 billion ($1.3 billion) for the first quarter of 2010 on the back of a rise in the price of gold and gains from its stabilisation fund investments, the central bank announced on Friday.

Gains from stabilisation fund investments, set up to ringfence the toxic assets of Swiss bank UBS, accounted for most of the profit, with the net result coming to Sfr1.6 billion. However, loss protection arrangements for the fund, an option to buy 100m UBS shares at a nominal value of 10 cents which was used at the end of last year, cost the central bank Sfr482m.

Gold rose to a high of $1,113.5 an ounce on 31 March, up 1.4% from $1,097.5 in January, resulting in a valuation gain of Sfr1.3 billion from gold deposits. The Swiss National Bank's total gold holdings amount to Sfr36.2 billion. However, the value of the central banks foreign currency fell by Sfr872m, wiping off some of the gains. Swiss franc positions offset some of these losses, amounting to Sfr112m. Expenses for the quarter came to Sfr74m.

The gains were down from the first quarter of 2009, when a rise in the price of gold accounted for Sfr4 billion of a Sfr4.9 billion profit.