Reserve Bank of Australia Annual Report – 2010 Financial Statements Note 2 – Net Profits

Note 2010 $M 2009 $M
Interest revenue
Overseas investments 1(b), 4   452   1,266
Australian dollar securities 1(b), 4   1,515   3,093
Overnight settlements 4   26   37
Gold loans 1(c), 4     4
Loans, advances and other 4   1   1
    1,994   4,401
Net gains on securities and foreign exchange
Overseas investments 1(b)     1,469
Australian dollar securities 1(b)     142
Foreign currency 1(b)     5,029
      6,640
Dividend revenue
Earnings on shares in Bank for International Settlements 1(b)   11   5
Fees and commissions
Banking services fees received     20   21
Other revenue
Reimbursement by Australian Government for loan management and registry expenses     1   1
Rental of Bank premises     9   9
Sales of note and security products     35   34
Other     24   26
    69   70
Total     2,094   11,137
Less:          
Interest expense
Deposit liabilities 1(b), 4   801   1,744
Currency note holdings of banks 1(b), 4   104   167
Repurchase agreements 1(b), 4   13   129
    918   2,040
Net losses on securities and foreign exchange
Overseas investments 1(b)   (416)  
Australian dollar securities 1(b)   (75)  
Foreign currency 1(b)   4,273  
    3,782  
General administrative expenses
Staff costs     148   149
Superannuation costs 1(h), 14   33   4
Special redundancy/retirement payments     2   3
Depreciation of property 1(d), 8   9   9
Depreciation of plant and equipment 1(d), 8   17   14
Premises and equipment 1(d)   37   37
Materials used in note and security products     23   20
Travel     3   4
Consultants' fees, legal fees and payments to contractors     2   2
Other     8   8
    282   250
Other expenses
Agency business reimbursement     3   3
Subsidiary income tax     2   3
Cash distribution expenses     6   4
Other     29   31
    40   41
Total     5,022   2,331
Net Profit     (2,928)   8,806

Staff costs in 2009/10 include an expense of $10.5 million associated with the increase in the balance of the provision for post-employment benefits (in 2008/09 there was an expense of $9.0 million) (refer Note 10). Post-employment health care costs of $10.3 million are included in Staff costs ($9.6 million in 2008/09).

The RBA's aggregate research and development expenditure recognised as an expense in 2009/10 was $0.7 million ($0.5 million in 2008/09); this is included in Other expenses.