RBA transfers $3.2bn dividend to budget despite slide in profit

The Reserve Bank will deliver a $3.2bn dividend to the Federal Government despite booking a sharp slide in net profit.

New Reserve Bank of Australia Governor Philip Lowe arrives for a parliamentary economics committee hearing in Sydney last month. (AFP PHOTO/PETER PARKS)

The Reserve Bank will deliver a healthy $3.2 billion dividend to the government despite reporting a 58 per cent slide in net profit in 2015-16.

In its annual report, the central bank said it had logged a net profit of $2.9bn in the 2016 financial year, down $4bn on the prior year.

Its earnings available for distribution jumped $1.1bn on the prior year to $4.6bn, however, allowing it to hand a welcome $3.2bn dividend to Treasurer Scott Morrison.

The payout is the highest since then Treasurer Wayne Swan claimed $5.2bn during the depths of the financial crisis in 2008-09 and represents a $1.3bn improvement on last year’s corresponding number.

Mr Morrison agreed to divert the remaining $1.4bn of distributable earnings to the Reserve Bank Reserve Fund after discussions with the central bank. The fund, which enables the RBA to absorb losses when necessary, now stands at $14.1bn.

Treasury will include the payment in its 2016-17 financial year reports.

The annual report also detailed a 2 per cent pay rise for key personnel at the central bank, with Governor Glenn Stevens receiving total remuneration of $1.03 million, up from $1.01m last year.