Reserve Bank of Australia Annual Report – 2006 Financial Statements Note 2

Note 2 NET PROFITS

Note 2006 $M 2005 $M
Interest revenue
Overseas investments 1(b), 4   2,092   1,265
Australian dollar securities 1(b), 4   1,322   1,069
Overnight settlements 4   49   42
Gold loans 1(c), 4   13   15
Loans, advances and other 4   1   1
      3,477   2,392
Net gains/(losses) on securities and foreign exchange
Overseas investments 1(b)   (826)   444
Australian dollar securities 1(b)   (137)   31
Foreign currency 1(b)   1,898   (1,385)
      935   (910)
Dividend revenue
Earnings on shares in Bank for International Settlements 1(b)   5   4
Fees and commissions
Banking services fees received     18   19
Other revenue
Reimbursement by Australian Government for
loan management and registry expenses		     1   1
Rental of Bank premises     6   6
Sales of note products     30   35
Other     26   15
      63   57
Total     4,498   1,562
Less:          
Interest expense
Deposit liabilities 1(b), 4   1,676   919
Currency note holdings of banks 1(b), 4   165   148
Repurchase agreements 1(b), 4   333   176
      2,174   1,243
General administrative expenses
Staff costs     111   119
Superannuation costs 1(h), 14   13   8
Special redundancy/retirement payments     -   1
Depreciation of property 1(d), 8   7   7
Depreciation of plant and equipment 1(d), 8   15   10
Premises and equipment 1(d)   28   26
Materials used in note production     22   21
Travel     3   2
Consultants' fees, legal fees and payments to contractors     2   6
Other     6   6
      207   206
Other expenses
Agency business reimbursement     3   3
Subsidiary income tax     -   –
Cash distribution expenses     8   6
Write down of plant and equipment 1(d)   -   –;
Other     13   20
      24   29
Total     2,405   1,478
Net Profit     2,093   84

Staff costs in 2005/06 include a reduction in expense of $4.9 million associated with the decrease in the balance of the Provision for post-employment benefits (expense of $10.6 million in 2004/05) (refer to Note 10). Post-employment health care costs of $4.7 million are included in Staff costs ($9.3 million in 2004/05).

The RBA's aggregate research and development expenditure recognised as an expense in 2005/06 was $0.6 million ($0.5 million in 2004/05); this is included in Other Expenses.