The Swiss National Bank (SNB) has recorded the worst loss in its 115-year history.

The central bank, which is around 78 per cent owned by Swiss public entities, revealed on Monday that it had lost CHf142.2 billion ($142.60 billion) in the first nine months of 2022.
The losses total more than the GDP of countries including Hungary, Ukraine and Morocco, but the SNB’s ability to create money means that it does not face bankruptcy.

The total includes a loss of CHf141 billion from foreign-currency positions – which itself includes exchange rate-related losses of CHf24.4 billion – while gold holdings lost CHf1.1 billion in value.

The losses contrast against profits of CHf41.4 billion for the first nine months of 2021, reflecting that even a safe haven like Switzerland is not immune to the wider economic pressures of the day.

While the bank will remain liquid as long as there is demand for Swiss currency, the loss could see SNB pause payouts to Swiss governments in 2023. The SNB distributed CHf 6 billion to federal and cantonal governments in 2021, including a payment of 716 million to the canton of Zürich.

Further losses could dent or entirely wipe out SNB’s equity, which was at CHf204 billion at the end of 2021.

However, ahead of the results SNB vice chairman Martin Schlegel told Swiss newspaper Finanz und Wirtschaft that equity losses would not impact the central bank’s operations and that “we can pursue our tasks and fulfil our mandate even with negative equity capital.”

In that interview, Schlegel also praised Credit Suisse’s recently announced measures to raise CHf 4 billion from investors while reducing staff numbers and shifting focus away from investment banking towards wealthy clientele.

"The SNB welcomes the steps recently announced for the strategic transformation of Credit Suisse. The new focus of the business model will lead to a reduction in risks. At the same time, Credit Suisse is strengthening its capital base,” he said.

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