ZURICH, March 5 (Reuters) - Switzerland’s central bank earned 2.02 billion Swiss francs ($2.16 billion) from negative interest rates it charges commercial banks during 2017, it said on Monday, up from 1.52 billion francs a year earlier.
The negative rates, part of the Swiss National Bank’s toolkit to keep the Swiss franc’s valuation in check, contributed to the bank’s biggest profit in its 110-year history.
The SNB confirmed full-year profit increased to 54.4 billion francs, more than double the 24.5 billion a year earlier, most of which came from its vast foreign currency positions. It reported a provisional profit figure in January.
The bank’s foreign currency investments expanded to 760 billion francs at the end of January, and are mostly made up of government bonds although 21 percent of its holdings are held in stocks including Apple Inc and Starbucks.
Making a profit is not an objective of the SNB, whose main mandate is to ensure price stability in Switzerland. The profit means the bank will be able to make an additional payment of 1 billion francs to the Swiss government and the country’s 26 cantons on top of the usual 1 billion francs payment.
Its dividend will remain at 15 francs, the legal maximum.
The SNB is due to give its next monetary policy assessment on March 15.
$1 = 0.9364 Swiss francs Reporting by John Revill