Reserve Bank of Australia Annual Report – 2013 Financial Statements Note 3 – Distribution Payable to the Commonwealth

Section 30 of the Reserve Bank Act requires that the net profits of the Reserve Bank of Australia, less amounts set aside for contingencies or placed to the credit of the RBRF as determined by the Treasurer after consultation with the Board, shall be paid to the Commonwealth (see Note 1(f)). Also under section 30, unrealised profits from foreign exchange, foreign securities and Australian dollar securities are not available for distribution. Instead they are transferred to the Unrealised Profits Reserve where they remain available to absorb future valuation losses or are realised when relevant assets are sold. Unrealised losses are, in the first instance, absorbed within the Unrealised Profits Reserve and are offset against unrealised profits accumulated from previous years. For purposes of distribution, if such losses exceed the balance in this reserve, the amount by which they do so is initially charged against other components of income with any remaining loss absorbed by the RBRF.

In 2012/13, the Bank recorded an accounting profit of $4,313 million. Earnings available for distribution were $588 million, comprising underlying earnings of $723 million minus realised losses of $135 million. Unrealised gains of $3,725 million were transferred to the Unrealised Profits Reserve.

After consulting the Reserve Bank Board, the Treasurer has determined that all earnings available for distribution in 2012/13, a sum of $588 million, are to be placed to the credit of the RBRF, consistent with the Board's aim of restoring the reserve. As a result, no dividend will be paid to the Commonwealth from earnings in 2012/13. A dividend of $500 million was distributed from 2011/12 earnings to the Commonwealth in September 2012.

2013 $M 2012 $M
Opening balance 500
Distribution to the Commonwealth (500)
Transfer from Statement of Distribution 500
As at 30 June 500