Reserve Bank of Australia Annual Report – 1991 Financial Statements Operating Earnings (and Net Profits)

NOTE 2 OPERATING EARNINGS (AND NET PROFITS) (NOTE 1(a))

Net profits in terms of the Reserve Bank Act in 1990/91 were $1,588 million, some $1,013 million higher than in 1989/90. Details are shown below and include amounts written off Bank premises, net unrealised losses on investments at balance date (see Note 1(e)) and amounts provided for contingencies in terms of section 78 of the Reserve Bank Act (see Note 3, 5). The maintenance of value payment to the International Monetary Fund results from the effects of movements in exchange rates on Australia's obligations to maintain the value, in Special Drawing Rights, of the International Monetary Fund's holdings of Australian currency.

1989/90
$'000 		  1990/91
$'000
  Revenues
1,248,480 Net earnings on overseas investments 1,562,506
444,240 Net earnings on Commonwealth Government securities 838,579
24,454 Interest on loans, advances, etc. 19,210
52,312 Overnight settlement interest received 22,356
6,969 Reimbursement by Commonwealth for loan management and registry expenses 6,243
6,138 Rents received 6,689
18,672 Net gains from sales of foreign currency (Note 1(b)) –
52,368 Other (Note 1(g)) 22,948
1,853,633 Total Revenues 2,478,531
Less: Expenses  
536,308 Interest on deposit liabilities 429,698
25,615 Overnight settlement interest paid 11,209
Staff costs:  
77,419 Salaries and wages 80,022
20,636 Superannuation contributions (Note 13) 18,764
8,621 Fringe benefits and payroll taxes 9,110
11,271 Other 9,919
22,280 Special voluntary termination/retirement payments (Note 11) 3,735
24,744 Premises, equipment and stores 30,010
6,349 Amounts written off bank premises (Note 6) 6,466
4,985 Depreciation of durable assets (Note 6) 7,678
– Net losses from sales of foreign currency (Note 1(b)) 55,518
– Net unrealised losses on investments (Note 1(e)) 80,761
5,460 Banking agency costs 6,303
4,809 Maintenance of value payment to International Monetary Fund 3,854
10,396 Other 12,165
758,893 Total Expenses 765,212
1,094,740 Net Operating Earnings 1,713,319
Less: Amounts provided for contingencies (Note 1(e), 3, 5) in terms  
520,000 of section 78 of the Reserve Bank Act 125,000
574,740 Net Profits in terms of the Reserve Bank Act 1,588,319

Net unrealised losses on investments and holdings of foreign currencies in 1989/90 totalled $199.2 million. These were charged against provision accounts maintained at that time and do not appear in the above figures for that year. (Refer Note 5 to 1989/90 Annual Report.)