Money blessing for the federal government and the cantons

The Swiss National Bank (SNB) has signed an additional agreement with the Swiss Federal Department of Finance (FDF) on the SNB’s distribution of profits. This provides for an increase in distributions for the 2019 and 2020 financial years to a maximum of CHF 4 billion, provided the distribution reserve exceeds certain thresholds, as reported by the FDF on Monday.

The current agreement from 2016 provides for an annual distribution of 1 billion and an increase to CHF 2 billion if the distribution reserve after appropriation of profits exceeds 20 billion. The earnings potential of the SNB has increased since 2016 and the distribution reserve has increased, according to the EVS. For 2019, the SNB achieved a definite net profit of CHF 48.9 billion, as it also announced on Monday.

Two more thresholds

That is why the FDF and the SNB decided to make an additional distribution. According to the information provided, the new agreement defines two additional thresholds: If the distribution reserve after the appropriation of profits exceeds 30 billion, the SNB will distribute an additional 1 billion to the federal government and the cantons for the financial year in question. And if the distribution reserve exceeds 40 billion, the SNB will distribute an additional 1 billion for the financial year in question.

With a distribution reserve of around 88 billion, both conditions are fulfilled for 2019. One third of the amount to be distributed goes to the federal government and two thirds to the cantons. After these payments, the distribution reserve will still be CHF 84.0 billion.

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