The Bank's Accounts | Reserve Bank of Australia Annual Report - 1994

Reserve Bank of Australia Annual Report – 1994 The Bank's Accounts

Commentary

The Bank's net operating earnings were $1,508 million in 1993/94, compared with $4,563 million in the previous year (Note 2). The major factors contributing to the decrease were net realised losses of $29 million on sales of domestic and foreign securities (net gains of $818 million in 1992/93), smaller net realised gains of $657 million from sales of foreign exchange (net gains of $1,985 million in 1992/93) and a charge of $676 million against earnings to write down the value of investments to a market value below cost (see Notes 1, 2).

In determining net profit, in terms of section 78 of the Reserve Bank Act, the Treasurer approved the Board's decision to write $6.1 million off Bank premises, and to seek no transfer to the Reserve for Contingencies and General Purposes.

The Bank's net profit for 1993/94 in terms of the Act was $1,508 million ($3,913 million in 1992/93). After consultation with the Board, the Treasurer determined that there should be no transfer to the Reserve Bank Reserve Fund from 1993/94 profit. The whole of net profit, therefore, is payable to the Commonwealth; this payment will occur in August 1994. There was no interim payment in June 1994 ($600 million in June 1993).

The Bank's balance sheet fell by $2.9 billion, to $33.6 billion, between June 1993 and June 1994. Significant changes included:

On the liabilities side, the main changes were falls in capital and reserves ($2.2 billion), reflecting the decline in asset revaluation reserves (see Notes 1(e), 3); in the amount of profit payable to the Commonwealth ($1.7 billion); and in overall deposits ($0.3 billion). A rise in notes on issue ($1.2 billion) partly offset these falls.
The major changes in assets were reductions in Commonwealth Government securities ($2.5 billion, including $0.9 billion in valuation changes), gold ($0.2 billion, all in valuation changes) and clearing items ($0.3 billion). Foreign exchange holdings rose by $0.2 billion after negative valuation adjustments of $0.7 billion.