Reserve Bank of Australia Annual Report – 2013 Financial Statements Note 2 – Net Profits

Note 2013 $M 2012 $M
Interest revenue
Foreign investments 1(b), 4 213 325
Australian dollar securities 1(b), 4 1,398 1,508
Overnight settlements 4 30 41
Loans, advances and other 4 1 1
  1,642 1,875
Net gains/(losses) on securities and foreign exchange
Foreign investments 1(b) (70) 426
Australian dollar securities 1(b) (244) 188
Foreign currency 1(b) 3,976 (228)
  3,662 386
Dividend revenue
Investment in Bank for International Settlements 1(b) 5 4
Fees and commissions
Banking services fees received   28 24
Other income
Reimbursement by Australian Government for loan management and registry expenses   1 1
Rental of Bank premises   9 9
Sales of note and security products   79 66
Gain on the sale of Securency   21 –
Other   28 21
  138 97
Total   5,475 2,386
Less:      
Interest expense
Deposit liabilities 1(b), 4 614 753
Currency note holdings of banks 1(b), 4 89 123
Cash collateral received 1(b), 4 2 –
Repurchase agreements 1(b), 4 3 13
  708 889
General administrative expenses
Staff costs   153 199
Superannuation costs 1(h), 14 97 45
Special redundancy/retirement payments   6 2
Depreciation of property 1(d), 8 8 7
Depreciation of plant and equipment 1(d), 8 19 18
Premises and equipment 1(d) 41 38
Materials used in note and security products 1(b) 70 48
Travel   3 3
Consultants' fees, legal fees and payments to contractors   6 8
Other   7 9
  410 377
Other expenses
Agency business reimbursement   12 7
Subsidiary income tax   – 3
Cash distribution expenses   5 5
Other   27 29
  44 44
Total   1,162 1,310
Net Profit   4,313 1,076

Staff costs in 2012/13 include a credit of $20.6 million associated with the decrease in the balance of the provision for post-employment benefits, mostly from post-employment health insurance (in 2011/12 there was an expense of $34.4 million) (refer Note 10). The large decrease in these provisions mainly reflected the increase in the discount rate, as measured by the yield on Commonwealth Government bonds.

The RBA's aggregate research and development expenditure recognised as an expense in 2012/13 was $0.7 million ($0.6 million in 2011/12); this is included in Other Expenses.

Comparative figures for staff costs and other expenses have been reclassified. Staff costs and other expenses in 2011/12 were previously shown as $192 million and $36 million, respectively.