Reserve Bank of Australia Annual Report – 1965 Annual Accounts

The balance sheets of the various sections of the Reserve Bank, as at 30th June, 1965, together with the Profit and Loss Appropriation Statement, appear on the following pages.

The Main Changes

The aggregate balance sheet shows that GOLD, AND BALANCES HELD ABROAD fell by £263 million while OTHER OVERSEAS SECURITIES rose by £106 million. These two items together comprise the Bank's holdings of gold and foreign exchange which fell by £157 million. AUSTRALIAN GOVERNMENT SECURITIES (INCLUDING TREASURY BILLS) held by the Bank increased by £64 million; holdings of Treasury bills declined by £30 million and other Government securities rose by £94 million, CHEQUES AND BILLS OF OTHER BANKS, mostly other bank cheques deposited by Reserve Bank customers and held pending clearance, were £14 million higher. An increase of £72 million in LOANS, ADVANCES AND BILLS DISCOUNTED reflected a rise in advances by Rural Credits Department to wheat and other rural marketing authorities of £56 million and in advances and bills discounted for other Reserve Bank customers of £16 million. BANK PREMISES increased by £4 million over the year as the Bank's new building programme was advanced. BILLS RECEIVABLE AND REMITTANCES IN TRANSIT were £7 million higher.

On the liabilities side, CAPITAL rose by £16 million. This increase was effected by transfer from the Reserve Bank Reserve Fund to the Central Banking Capital Account in terms of section 29 (2) of the Reserve Bank Act 1959. The corresponding decrease in the Reserve Bank Reserve Fund was partly offset by the allocation from the year's profits so that, in aggregate, RESERVE FUNDS fell by £13 million.

AUSTRALIAN NOTES ON ISSUE increased by £3 million. DEPOSITS, BILLS PAYABLE AND ALL OTHER LIABILITIES fell by £3 million. The Central Banking Business balance sheet shows that STATUTORY RESERVE DEPOSIT ACCOUNTS OF TRADING BANKS fell by £11 million; although deposits with trading banks increased over the year, the S.R.D. ratio was reduced from 15.5 per cent to 13.8 per cent. TERM LOAN FUND ACCOUNTS OF TRADING BANKS declined by £3 million, reflecting an excess of drawings by banks in respect of loans to customers over additions to the Fund during the year, and OTHER DEPOSITS OF TRADING BANKS rose by £2 million. DEPOSITS OF SAVINGS BANKS decreased by £1 million. Other liabilities, which include deposits of Australian governments and other central banking customers and provisions for contingencies, increased by £10 million over the year.

Inter-departmental accounts — mainly advances by the Central Bank to the Rural Credits Department — amounting to £107 million have been offset in the aggregate balance sheet.

Profits

Net profits of the various sections of the Bank for the year ended 30th June, 1965, after deducting amounts written off Bank premises and amounts provided for contingencies, were as follows:

Of the net profits, £20,510,402 was paid to the Commonwealth of Australia, £2,646,782 to the Reserve Funds of the Bank and £249,971 to the Rural Credits Development Fund.

A comparison of the above figures with those for 1963/64 shows that net profits in the three sections increased in 1964/65. Higher interest rates available in London since November are reflected in the increased profit on Central Banking Business and in the Note Issue Department. A higher level of average assets also contributed to the rise in Central Banking profits. The slight increase in net profits for the Rural Credits Department resulted mainly from a slightly higher average level of outstanding advances over the year.