Reserve Bank of Australia Annual Report – 1963 Annual Accounts

The balance sheets of the various sections of the Reserve Bank at 30th June, 1963 appear on pages 28–29 and 30–31 of this Report, together with comparable figures at 30th June, 1962.

The Main Changes

The aggregate balance sheet shows that Gold and balances held abroad increased by £51 million in 1962/63; these constitute the major part of Australia's international reserves, the remainder being mainly Other overseas securities, which changed little in 1962/63, and overseas funds in the hands of the trading banks. Australian Government securities (including treasury bills) held by the Bank fell by £69 million, mainly because the favourable response of investors to the tap issue of Treasury notes, which commenced in 1962/63, enabled the Commonwealth Government to redeem Treasury bills on issue to the Bank. Loans, advances and bills discounted rose by £49 million over the year, reflecting mainly a rise in outstanding advances of the Rural Credits Department for processing and marketing primary products. This increase in advances necessitated increased borrowing by the Department from the Central Banking section of the Bank; the total amount of such borrowing at 30th June, 1963 was £93 million.

Australian notes on issue increased by £6 million. Deposits, bills payable and all other liabilities in the aggregate balance sheet increased by £24 million: the Central Banking Business balance sheet shows that Statutory Reserve Deposit Accounts of trading banks increased by £29 million, which resulted from the increase of 1 per cent in the S.R.D. ratio and the growth of the S.R.D. base (i.e. deposits with Australian trading banks); Other deposits of trading banks fell by £36 million, largely reflecting drawings on Term Loan Fund Accounts established towards the end of 1961/62; Deposits of savings banks, whose own depositors' balances increased strongly during the year, rose by £25 million; Deposits of overseas institutions, which include deposits of overseas governments and central banks and of international financial institutions, increased by £3 million; and other deposits and liabilities, which include balances of Australian governments and other central banking customers, provisions for contingencies and miscellaneous items, increased by £5 million.

In the aggregate balance sheet, inter-departmental accounts—mainly advances by the Central Bank to the Rural Credits Department—amounting to £93 million have been offset.

Profits

Net profits of the various sections of the Bank for the year ended 30th June, 1963, after deducting amounts written off bank premises and amounts provided for contingencies, are as follows:

Of the net profits, £14,455,913 was paid to the Commonwealth of Australia, £1,897,605 to the Reserve Funds of the Bank and £222,001 to the Rural Credits Development Fund.

As can be seen from a comparison of figures shown on pages 28 and 29, net profits in all sections fell in 1962/63. Interest rates in London in 1962/63 were considerably below levels ruling in the previous year and the consequent reduction in earnings on the Bank's investments in London was largely responsible for the decreases in profit in the Note Issue Department and in profit from Central Banking Business. In the latter case, an increase in the amount of interest paid on deposits in Australia also contributed to the reduction in profit.