UBS: Central Bank Set to Distribute 4 Billion Swiss Francs
A palpable sense of relief is likely among cantonal finance directors. In these uncertain times, they can expect to receive 4 billion Swiss francs from the Swiss National Bank (SNB) thanks to an excellent annual result. In 2025, the distribution had still amounted to 3 billion francs.
The SNB will publish its first figures for the 2025 annual result only on Friday. As usual, however, UBS economists have already issued an estimate in advance. The major bank assumes that the SNB generated a profit of 11 to 16 billion francs in the fourth quarter, implying a full-year profit in the range of 23.5 to 28.5 billion francs.
Valuation Swings in Foreign Currency Reserves Dominate
The SNB reports on a quarterly basis. However, its interim results should be treated with caution, as they are heavily influenced by developments in exchange rates, equity markets, interest rates and the gold price, given the large volume of foreign currency reserves.
How do the two authors of the study, Alessandro Bee and Florian Germanier from UBS’s Chief Investment Office GWM, arrive at the figures?
Lucrative Gold Rally
In the fourth quarter alone, the rise in the gold price should have generated a profit of 13 billion francs for the SNB. For the full year, this results in a valuation gain of 36 billion francs in gold.
Gold was therefore the main driver of the SNB’s profit in 2025. If ever there was an opportunity to recall the SNB’s past gold sales? A rhetorical question – though not from UBS, but from finews, which already suggested over a year ago that the gold issue should be revisited.
More than Half Gone
By way of reminder, in brief: between May 2000 and March 2005, the SNB liquidated 1,300 tonnes of gold. Between 2007 and 2009, albeit for different reasons, it sold a further 250 tonnes. Since then, gold holdings have stood at 1,040 tonnes.
Back to 2025. The SNB’s equity portfolio also performed positively thanks to favourable market conditions. Here, profits amounted to 6.5 billion francs in the fourth quarter and 30 billion francs for the full year 2025.
(Graphic: UBS)
The fourth-quarter profit would have been even higher had the Swiss franc not continued to appreciate. UBS economists estimate the resulting negative currency effect at 7 billion francs for the quarter and 55 billion francs for the full year.
According to UBS, interest rate developments played only a minor role in the fourth quarter and reduced the result by 2.5 billion francs. This drag was more than offset by recurring income for dividends and coupon payments amounting to 3.5 billion francs.
Crumbs for SNB Shareholders
Under the distribution agreement between the Federal Department of Finance and the SNB for the 2020-2025 financial years, a distribution of 4 billion francs can therefore be made. Two thirds will go to the cantons, which are also shareholders; the remainder will be transferred to the federal government, which is not a n SNB shareholder.
Speaking of SNB shareholders: they also include around 2,800 private shareholders, who can expect the maximum dividend of 6 percent of nominal value—18 francs per registered share. In total, this results in a comparatively meagre dividend sum of 1.5 million francs.
New Distribution Agreement: a Difficult Balancing Act
For the coming years, the distribution agreement will need to be renegotiated. A new agreement is expected to be presented in the coming months. Cantons and the federal government have a fundamental interest in distributions that are as steady and substantial as possible. At present, this interest is particularly pronounced, given that even modest consolidation programmes (the «Relief Package 27») are struggling to gain traction in the political process. In addition, billions of francs are being sought urgently to restore defence capabilities and national security.
For the SNB, the negotiations will focus on ensuring that it can continue to meet the objective set out in its 2024 annual report (page 159): «The National Bank aims for a robust balance sheet with sufficient equity to be able to absorb even potentially high losses.»
Indeed, the fact that significant risks are embedded in the SNB’s vast balance sheet—total assets of 887 billion francs at the end of September 2025, including around 100 billion francs in gold and 765 billion francs in foreign currency investments—is not altered by the likely very favorable result for 2025.