KUALA LUMPUR: Bank Negara Malaysia will pay RM3.5 billion dividend to the government this year, after posting higher net profit in its financial year ended December 31 2019.
This was RM1 billion more than the RM2.5 billion dividend paid previously, according to Bank Negara’s Annual Report 2019 released today.
Bank Negara’s net profit surged to RM8.93 billion, from RM7.52 billion in 2018, on a total income of RM11.13 billion (2018: RM9.33 billion) generated from its investments of the country’s international reserves.
The dividend can be used by the government to finance its measures to help business and Malaysians during the challenging times, Bank Negara governor Datuk Nor Shamsiah Yunus said at a virtual press briefing on Thursday ahead of the release of the annual report together with Economic and Monetary Review 2019 and Financial Stability Review 2H 2019 today.
Bank Negara said the balance of RM5.4 billion from the overall net profit was transferred to its risk reserve.
“The risk reserve acts as a crucial financial buffer against unexpected losses arising from unfavourable market conditions that are not within our control,” Bank Negara said.
This included movements of interest rates in the United States and other advanced economies, fluctuations in foreign exchange and global equity markets.
Bank Negara is exposed to foreign exchange volatility in particular due to investment of the international reserves which are in foreign currency, while its liabilities are in ringgit.
The central bank’s assets rose to RM451.6 billion from RM447.64 billion in 2018, with international reserves portfolio accounting for 94 per cent or RM424.09 billion of the total assets.
Bank Negara said its liabilities mainly arose from deposits by financial institutions (RM163.71 million) and currency in circulation (RM114.1 billion).
The central bank spent RM2.16 billion last year (2018: RM1.77 billion) to manage and administer its day-to-day operations as well as to finance developmental and long-term projects.
This included expenditures incurred for its currency operations and to maintain the country’s payment infrastructure.