Reserve Bank of Australia Annual Report – 2008 Financial Statements Note 2

Note 2 NET PROFITS

Note 2008 $M 2007 $M
Interest revenue      
Overseas investments 1(b), 4 2,042 3,276
Australian dollar securities 1(b), 4 3,092 2,056
Overnight settlements 4 61 56
Gold loans 1(c), 4 8 11
Loans, advances and other 4 1 1
  5,204 5,400
Net gains/(losses) on securities and foreign exchange      
Overseas investments 1(b) 506 (80)
Australian dollar securities 1(b) (34) (117)
Foreign currency 1(b) (1,137) (2,577)
  (665) (2,774)
Dividend revenue      
Earnings on shares in Bank for International Settlements 1(b) 4 4
Fees and commissions      
Banking services fees received   18 17
Other revenue      
Reimbursement by Australian Government for
loan management and registry expenses		   – 1
Rental of Bank premises   8 7
Sales of note and security products   41 31
Superannuation revenue 1(h), 14 8 –
Other   25 24
  82 63
Total   4,643 2,710
Less:      
Interest expense      
Deposit liabilities 1(b), 4 2,342 3,150
Currency note holdings of banks 1(b), 4 199 179
Repurchase agreements 1(b), 4 399 528
  2,940 3,857
General administrative expenses      
Staff costs   141 118
Superannuation costs 1(h), 14 – 15
Special redundancy/retirement payments   – 1
Depreciation of property 1(d), 8 9 6
Depreciation of plant and equipment 1(d), 8 13 10
Premises and equipment 1(d) 34 31
Materials used in note and security products   21 22
Travel   3 3
Consultants’ fees, legal fees and payments to contractors   2 2
Other   8 9
  231 217
Other expenses      
Agency business reimbursement   2 3
Subsidiary income tax   3 2
Cash distribution expenses   5 6
Other   32 18
  42 29
Total   3,213 4,103
Net Profit   1,430 (1,393)

Staff costs in 2007/08 includes an expense of $12.8 million associated with the increase in the balance of the Provision for post-employment benefits (in 2006/07 there was a credit of $1.3 million) (refer Note 10). Post-employment health care costs of $13.5 million are included in Staff Costs ($1.4 million in 2006/07).

The RBA's aggregate research and development expenditure recognised as an expense in 2007/08 was $0.6 million ($0.7 million in 2006/07); this is included in Other Expenses.