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(correction: price of gold)  Zurich, Switzerland (GenevaLunch) – The Swiss National Bank has posted a positive half-year result of CHF5 billion before provisions, compared to a loss of CHF3.4b a year earlier. The SNB ended 2008 with a loss of CHF4.3b. The central bank’s legal obligations require it to set aside provisions that allow it to maintain currency reserves at a level necessary for monetary policy. For the first six months, CHF701.8 million will be allocated to provisions. The stabilization fund set up to bail out bank UBS had no impact on the results, the SNB points out.

The higher price of gold accounted for most of the improvement. The price of gold has risen since December 2008 from CHF29,640 per kilo to CHF32,545, boosting the valuation of the Swiss National Bank’s holdings by CHF3 billion. The bank says that virtually all investment types contributed to the positive results, with interest earnings from foreign currency positions having a “significant” impact. Equities securities benefited from rebounding markets, but Swiss franc investments brought only “modest” earnings.

The stabilization fund set up to manage UBS’s illiquid assets has benefited from a “slight improvement in some markets”, with some securities sold. The SNB’s loan to the fund stands $23.5 billion (reporting period closing date). The cumulated loss (since 1 October 2008) posted by the stabilization fund amounts to $4.5 billion and exceeds UBS’s equity contribution by $628 million. At the end of 2008 the fund’s loss stood at $1.69b with approximately $50 million which exceeded the UBS equity contribution by $50 million. The difference is covered by a secondary loss protection for the SNB: a warrant for 100 million UBS shares at nominal value, and they thus do not appear in the SNB results. The additional losses are linked to the agreed transfer in April of the last of the UBS illiquid assets.