BANK Negara Malaysia (BNM) will pay a higher dividend of RM3.5 bil to the government for 2019, up 40% from the preceding year’s RM2.5 bil.
In its Annual Report 2019, the central bank said it generated RM8.93 bil in net profit after tax last year compared with RM7.52 bil in the previous year.
Of the RM8.93 bil, BNM has transferred RM5.4 bil to its risk reserve account, up from RM5 bil in 2018. The risk reserve acts as a crucial financial buffer against unexpected losses arising from unfavourable market conditions that are beyond the central bank’s control.
“The unfavourable market conditions include movement of interest rate in the United States and other advanced economies as well as fluctuations in foreign exchange and global equity markets,” BNM said in the report.
The report also noted that the bank is exposed to foreign exchange volatility, in particular due to investments of the international reserves which are in foreign currency, while the liability is in ringgit.
BNM also reiterated that despite its status as a statutory body, it does not rely on public funds from the government to support its day-to-day operations.
“(We) are funded by income generated from our investments of the country’s international reserves,” it said, adding that BNM generated a total income of RM11.13 bil last year against RM9.33 bil in 2018 after deducting costs associated with managing the international reserves portfolio and conducting monetary operations.
“Against this, we incurred expenses of RM2.16 bil in 2019 versus RM1.77 bil in 2018 to manage day-to-day operations (recurring expenditure) and also expenses to finance developmental and long-term projects,” BNM said. The expenditures incurred were for the currency operations and to maintain the country’s currency infrastructure.
As of Dec 31, 2019, BNM’s assets totalled RM451.6 bil versus RM447.64 bil in 2018, with an international reserves portfolio valued at RM424.09 bil which constituted the bulk (94%) of the bank’s assets.
Its liabilities came mainly from deposits from financial institutions (RM163.71 bil) as well as currency in circulation (RM114.1 bil). — April 3, 2020, Bernama
