Reserve Bank of Australia Annual Report – 1960 Financial Statements Annual Accounts

Balance Sheets

The balance sheets of the various sections of the Reserve Bank are set out on pages 32–33 and 34–35 of this Report. They are in the form prescribed in the regulations under the Reserve Bank Act 1959 and whilst they are substantially in the same form as those prepared previously for the Commonwealth Bank, there are some changes. For purposes of comparison, balance sheets for the year ended 30th June, 1959, have been reconstructed to conform with the new regulations and the relative figures are shown against those for the current year.

During the year there were exchanges of assets between the Central Bank and Note Issue Department, which had the effect of increasing the Note Issue Department's holdings of gold and balances held abroad and other overseas securities, and reducing its holdings of Australian Government securities (including Treasury bills), with consequential movements in Central Bank assets.

The following is a brief description of some of the items contained in the statements.

Central Banking Business

Deposits, bills payable and all other liabilities—Other. This item comprises deposits of various Australian governments and other central banking customers not shown specially in the balance sheet. It also includes provisions for contingencies and all other liabilities.

Loans, advances and bills discounted. Advances to Rural Credits Department under Section 61 of the Reserve Bank Act and to other central banking customers are shown under this heading.

Rural Credits Department

All other liabilities. This item includes £63 million borrowed from the Central Bank, deposits of customers temporarily in credit and provisions for contingencies.

Aggregate Balance Sheet

In terms of the 1959 banking legislation, the accounts of the Industrial Finance and Mortgage Bank Departments of the Commonwealth Bank were transferred to the Commonwealth Development Bank. The liabilities and assets of those departments, which were previously included in the Aggregate Balance Sheet of the Commonwealth Bank, therefore no longer appear and have also been omitted from comparative figures compiled for 30th June, 1959. In the balance sheet for 30th June, 1960, inter-departmental accounts offset totalled £63,573,326. The major part of this amount represents advances by the Central Bank to the Rural Credits Department.

Reserve Bank Reserve Fund

The reduction in this reserve, which may be seen in the balance sheet of Central Banking Business, is due to transfers therefrom totalling £9 million to provide additional capital for the Commonwealth Development Bank (£5 million), Commonwealth Trading Bank (£2 million), and Rural Credits Department (£2 million), in terms of Sections 30 and 75 of the Commonwealth Banks Act and Section 58 of the Reserve Bank Act.

It will be noted from the profit and loss appropriation statement that the sum of £2,690,485 was credited to the reserve from profits on Central Banking Business.

Profits

Details of net profits after deducting amounts written off bank premises and amounts provided for contingencies were as follows.

Of the net profits, £13,206,487 was paid to the Commonwealth of Australia and £2,851,539 to the Reserve Funds of the Bank, and £161,054 to the Rural Credits Development Fund.

A comparison of the net profits of the various sections with those earned the previous year is set out on pages 32 and 33 of this Report.

It should be noted that, whereas previously one half of the profit relating to Central Banking Business was paid to the National Debt Sinking Fund and one half to the Bank's Reserve Fund, under the new legislation such amount as the Treasurer of the Commonwealth, after consultation with the Bank Board, determines is placed to the credit of the Reserve Bank Reserve Fund and the remainder is paid to the Commonwealth. On this occasion one half of the profit has been placed to the credit of the Reserve Fund.

The Reserve Bank has no statutory obligation to pay local rates but voluntary contributions, equivalent to the amount which would have otherwise been due, have been made to the local authorities concerned.