SNB reaps profit from weakening franc The Swiss National Bank expects to make a profit of more than SFr6bn ($6.4bn) for 2012, after the weakening franc bolstered the value of its foreign exchange reserves, and it reaped rewards from rising gold prices. Since the SNB pledged in September 2011 that it would enforce a minimum exchange rate against the euro, its holdings of foreign exchange have mushroomed. It has bought huge sums of the single currency to maintain its target threshold of SFr1.20 per euro. By last summer, as the SNB battled inflows from panicking investors seeking a haven from the eurozone crisis, its foreign exchange reserves had surged past SFr400bn, leading to fears that the central bank could face significant losses if the franc were to strengthen further. However, following Mario Draghi's pledge at the end of July to do "whatever it takes" to defend the euro, the pressure on the franc has abated. This morning it fell against the euro to SFr1.2434 - within touching distance of its lowest level since the minimum exchange rate was introduced. The downward trend has bolstered the value of the SNB's currency holdings. The central bank said that, over the course of the year, its foreign exchange positions had contributed SFr4.7bn to its profits, while a rise in the value of its gold holdings had added SFr1.4bn. The SNB also expects the stabilisation fund of toxic assets that it set up in 2008 when it rescued UBS to add to its profits, although a spokesman said that the contribution would not be enormous. Full details will be released on March 7. Despite the positive result, which will allow the SNB to pay a SFr1bn dividend to the Swiss confederation and its 26 cantons, economists said that a change in the central bank's policy was unlikely. "I wouldn't expect this to lead to a change in the minimum exchange rate," said Oliver Adler, head of global economics at Credit Suisse. The SNB wouldn't want to risk being branded a currency warrior, and will be happy that the franc is anyway moving away from the floor.