BANK Negara Malaysia will pay the government a dividend of RM3.5 billion this year, which is a billion more paid last year.

The central bank said in its Annual Report 2019 that it had recorded a net profit of RM8.93 billion in the year under review, 18% higher than the RM7.52 billion registered in 2018.

A total of RM5.4 billion from the RM8.93 billion was transferred to its risk reserve which acts as a crucial financial buffer against unexpected losses arising from unfavourable market conditions that are not within our control.

“This includes movements of interest rates in the United States and other advanced economies, fluctuations in foreign exchange and global equity markets.

“The bank is exposed to foreign exchange volatility in particular due to investment of the international reserves which are in foreign currency, while our liabilities are in ringgit,” it said.

Meanwhile, the remaining RM3.5 billion will be paid out as dividends to the government.

The central bank also reported a total income of RM11.13 billion compared to RM9.33 billion reported in 2018.

“Although we are a statutory body, we do not rely on public funds from the government to support our day- to-day operations.

“Instead, our operations are funded by income generated from our investments of the country’s international reserves.

“In 2019, we generated a total income of RM11,129 million (2018: RM9,334 million), net of costs associated with managing the international reserves portfolio and conducting monetary operations.

“Against this, we incur expenses to manage and administer our day-to-day operations and also expenses to finance developmental and long term projects in line with our principal objects and functions.”

It also incurred an expenditure of RM2.16 billion through its currency operations and the maintenance of the country’s payment infrastructure.  This is higher than the RM1.77 billion incurred in 2018.

As of December 31, Bank Negara’s assets totalled to RM451.6 billion, up from RM447.6 billion a year ago.

International reserves portfolio constituted 94% of its assets at RM424.09 billion.

“Our liabilities arise mainly from deposits by financial institutions (RM163,714 million) and currency in circulation (RM114,097 million),” it said. – April 3, 2020.