Reserve Bank of Australia Annual Report – 1986 Financial Statements Consolidated Operating Earnings (and Net Profits)

Note 2 Consolidated Operating Earnings (and Net Profits)

Consolidated net profits in 1985/86 were $2,492.0 million, some $820.8 million higher than in 1984/85. Details are shown below and include amounts written off Bank premises and provided for contingencies approved by the Treasurer in terms of Section 78 of the Reserve Bank Act Note 3 5. Transfers to the Reserve Funds, which fall within the terms of Sections 30 and 63 of the Reserve Bank Act, are included in the appropriation statement.

1984/85 $'000   1985/86 $'000
  Revenues
831,546 Net earnings on overseas investments 601,169
637,719 Net earnings on Commonwealth Government securities 1,120,097
49,601 Interest on loans, advances, etc. 53,403
15,022 Reimbursement by Commonwealth for loan management and registry expenses 16,359
3,908 Rents received 4,729
771,282 Net gains from sales of foreign currency (Note 1) 1,349,615
11,279 Other income 42,052
2,320,357 Total Revenues 3,187,424
  Less: Expenses
155,774 Interest on deposit liabilities 313,850
101,189 Staff costs 107,708
4,289 Depreciation of durable assets (Note 6) 6,213
102,838 Other expenses 74,734
364,090 Total Expenses 502,505
1,956,267 Operating Earnings 2,684,919
5,749 Less: Amounts written off bank premises (Note 6) 5,500
279,319 Amounts provided for contingencies (Notes 3, 5) 187,393
1,671,199 Net Profit 2,492,026

Other income includes net realised gains of $3.0 million on the sale of two Bank properties. Included in other expenses is an amount of $39.4 million ($65.0 million in 1984/85) representing the Bank's contribution to maintaining the value of the IMF's holdings of Australian currency in terms of the SDR. If the forward exchange contracts outstanding at 30 June 1986 were delivered at exchange rates ruling at that date there would be a negligible impact on the accounts.