Reserve Bank of Australia Annual Report – 1996 The Bank's Accounts

Commentary

The Bank's net operating earnings were $2,486 million in 1995/96, an increase of $714 million on the previous year. This outcome reflected an increase in “underlying” earnings of $135 million and an increase of $579 million in net capital gains on the Bank's holding of securities and foreign exchange. An explanation has been provided earlier in this Report.

In determining net profit, in terms of section 78 of the Reserve Bank Act, the Treasurer approved the Board's decision to write $6.9 million off Bank premises and approved the transfer of $100 million to the Reserve for Contingencies and General Purposes.

The Bank's net profit for 1995/96 in terms of the Act was $2,386 million ($1,772 million in 1994/95). After consultation with the Board, the Treasurer determined that $50 million should be transferred to the Reserve Bank Reserve Fund from 1995/96 profit. The remaining $2,336 million of net profit is payable to the Commonwealth. An interim payment of $200 million was made in June 1996 and the balance will be paid in August 1996.

The Bank's balance sheet decreased by $0.9 billion, to $36.0 billion, between June 1995 and June 1996.

• On the liabilities side, the main change was a fall in capital and reserves ($2.4 billion), reflecting a decline in asset revaluation reserves. This fall was partly offset by an increase in notes on issue ($0.6 billion); in the amount of profit payable to the Commonwealth ($0.6 billion); and in overall deposits ($0.4 billion).
• The major changes in assets were reductions in foreign exchange holdings ($0.5 billion, including $1.3 billion in valuation changes) and in gold ($0.5 billion, all in valuation changes).