Reserve Bank of Australia Annual Report – 1967 Annual Accounts Notes on Annual Accounts

Profits

Net profits of the various sections of the Bank totalled $43,583,134 being $2,604,400 higher than for the year to June, 1966. Of the net profits in 1966/67 $38,759,966 was paid to the Commonwealth of Australia, $4,161,584 to the Reserve Funds of the Bank and $661,584 to the Rural Credits Development Fund.

Net profit from Central Banking Business decreased by $770,492 to $7,941,936. The average level of assets was lower but this was partly offset by higher average interest rates earned on investments particularly in United Kingdom and U.S.A.

Note Issue Department profit increased by $3,248,003, to $34,318,030. This resulted mainly from a combination of a higher average level of assets and higher earning rates on London investments.

Net profit of Rural Credits Department rose by $126,889 to $1,323,168; the main factor contributing to the increase was a higher average level of advances outstanding which was largely a reflection of the record wheat harvest.

Balance Sheets

Changes in many of the major items in the Bank's aggregate balance sheet have been referred to in earlier parts of this Report. The most significant of the changes are summarized below.

GOLD, AND BALANCES HELD ABROAD fell by $195 million and OTHER OVERSEAS SECURITIES rose by $37 million. These two items comprise the Bank's holdings of Gold and Foreign Exchange and the steady decrease in this item during most of the year is discussed in the International Capital Transactions section of the Report.

AUSTRALIAN NOTES AND COIN held by the Bank decreased by $12 million; the Bank's holdings of coin had been above normal at June, 1966 due to the changeover to decimal currency.

AUSTRALIAN GOVERNMENT SECURITIES (INCLUDING TREASURY BILLS) increased by $124 million; holdings of Treasury bills rose by $10 million and other Australian Government securities by $114 million. Factors affecting these items, including the funding of $80 million of Treasury bills and the end of year defence borrowing, are discussed in the Liquidity and Open Market Transactions section of the Report.

LOANS, ADVANCES AND BILLS DISCOUNTED increased by $173 million. This included an increase of $186 million in advances by Rural Credits Department to wheat and other rural marketing authorities commented on in page 32 of the Report and the $30 million drawn under the credit facilities made available to Reserve Bank of New Zealand. However there was a decrease of $43 million in advances and bills discounted for other Reserve Bank customers.

BILLS RECEIVABLE AND REMITTANCES IN TRANSIT were $21 million higher, reflecting mainly an increase in amounts owed to the Reserve Bank in respect of exchange clearances with other banks on 30th June.

AUSTRALIAN NOTES ON ISSUE rose by $95 million mainly resulting from increased public requirements during the year.

DEPOSITS, BILLS PAYABLE AND ALL OTHER LIABILITIES, which includes deposits of trading and savings banks, Australian Governments, overseas institutions and other Reserve Bank customers and provisions for contingencies, in aggregate rose by $49 million.

Changes in deposits of trading and savings banks as disclosed in the Central Banking Business balance sheet were:—

STATUTORY RESERVE DEPOSIT ACCOUNTS OF TRADING BANKS rose by $2 million. The effect of the reduction in the S.R.D. ratio from 9.4 per cent to 8.9 per cent was slightly more than offset by a rise in deposits with trading banks. (See page 24).

TERM LOAN FUND ACCOUNTS AND FARM DEVELOPMENT LOAN FUND ACCOUNTS OF TRADING BANKS declined by $7 million and by $18 million respectively (See page 24). OTHER DEPOSITS OF TRADING BANKS fell by $6 million.

DEPOSITS OF SAVINGS BANKS rose by $74 million reflecting investment of part of the increase in deposits with savings banks. The increase was most pronounced during the second half of the year (See page 28).

Inter-departmental accounts—mainly advances by the Central Bank to the Rural Credits Department—amounting to $328 million have been offset in the aggregate balance sheet.