March 7, 2013 / 7:52 AM / 5 years ago

Bond, equity gains boost Swiss central bank 2012 profit

* Income, price gains from bonds 8.4 bln Sfr, 6.7 bln from equities

* Gains of 1.4 bln Sfr on gold holdings

* To distribute 1 bln Sfr to cantons and federal government

ZURICH, March 7 (Reuters) - Gains on a range of investments contributed to 2012 profits at the Swiss National Bank, it said on Thursday.

The SNB said net profit was 6 billion Swiss francs ($6.34 billion), confirming preliminary figures it reported in January.

Some 4.5 billion came from the huge foreign currency positions it has accumulated to keep a lid on the strong franc, and 1.4 billion from its gold holdings.

It said income and price gains on interest-bearing paper and instruments came in at 8.4 billion compared to 6.7 billion from equity securities.

They together more than compensated for exchange rate-related losses of 10.6 billion francs, incurred on the appreciation of the franc against the yen and dollar.

The SNB capped a soaring franc at 1.20 per euro in September 2011 to help stave off recession and the threat of deflation and was forced to intervene heavily last year as the euro zone crisis flared, swelling its huge foreign currency reserves.

The SNB’s foreign exchange reserves peaked at almost 430 billion francs last September, or over 70 percent of annual output, but have gradually fallen as tension in the euro zone lessened, standing at 427 billion at the end of last year.

The SNB held 82 percent of its foreign currency holding in government bonds at the end of 2012 and 12 percent in equities, with 49 percent of the portfolio held in euro-denominated assets, 28 percent in U.S. dollars and 8 percent in yen.

The central bank said a fund of toxic assets from UBS , the country’s largest bank which had to be bailed out in 2008, had also contributed 0.9 billion to profits.

The SNB reiterated it would distribute 1 billion francs in dividends to the cantons and the federal government. Switzerland’s 26 cantons, or states, are the central bank’s biggest shareholders.

$1 = 0.9465 Swiss francs Reporting by Emma Thomasson; Editing by John Stonestreet

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