07:32 AM EDT, 08/01/2024 (MT Newswires) -- The Swiss central bank (SNB) released its interim report for Q2 on Wednesday, posting a two billion Swiss francs loss in Q2, noted UBS.

The loss arose from currency developments, bond losses and interest expenditure while the equities portfolio in local currency and gold contributed positively, wrote the bank in a note to clients. After the sizable profit in Q1, this puts the year-to-date (YTD) profit at 56.8 billion Swiss francs, keeping hopes for a profit distribution to the cantons and Confederation alive.

UBS calculates that a total profit of 67 billion Swiss francs would be needed this year to allow for a minimum profit distribution of two billion Swiss francs compared with the maximum of six billion Swiss francs that were distributed in 2020 and 2021. This requires an ongoing positive market environment and/or renewed Swiss franc (CHF) depreciation in the second half of the year to maintain the H1 profit and generate another 10 billion Swiss francs profit in H2.

To be able to pay out the maximum profit distribution of six billion Swiss francs, the distributable profit must be at least 40 billion Swiss francs (as per the agreement between the SNB and the Federal Department of Finance), stated UBS. This implies that the SNB would have to generate another 48 billion Swiss francs profit in H2 so that the total 2024 profit would exceed 105 billion Swiss francs -- an extraordinarily large number compared to the results of the past years.