KUALA LUMPUR: Bank Negara Malaysia’s (BNM) total assets increased to RM619.04 billion as at Dec 31, 2022, as compared with RM551.61 billion the year before, with RM503.33 billion of international reserves portfolio constituting the bulk (81 per cent) of the assets.
Its liabilities arise mainly from deposits by financial institutions (RM221.89 billion) and currency in circulation (RM162.07 billion), BNM said in its Annual Report 2022 released here today.
"In 2022, we generated a total income of RM8.51 billion (2021: RM14.65 billion), net of costs associated with managing the international reserves portfolio and conducting monetary operations,” it said.
Against this, BNM incurs expenses to manage and administer its operations ("recurring expenditure”) and expenses to finance developmental and long-term projects in line with its principal objects and functions ("development expenditure”).
This includes expenditures incurred for the bank’s currency operations and to maintain the country’s wholesale payment infrastructure.
In 2022, total recurring and development expenditures amounted to RM1.48 billion (2021: RM1.81 billion). In 2022, BNM generated RM6.99 billion in net profit (average 2017 - 2021: RM9.39 billion).
The lower net profit was due to weaker investment returns on the back of significant challenges and volatilities in the international financial market amid aggressive interest rate hikes in advanced economies that led to lower valuations, the military conflict in Ukraine and concerns over prolonged lockdown in China.
The lower profit was not unique to Malaysia but also experienced by other central banks, it said.
Of the total net profit in 2022, RM4.23 billion will be transferred into its Risk Reserve (2021: RM7.80 billion was transferred into General Reserve Fund).
"As the global economy is expected to remain challenging, it is imperative for the bank to continue to strengthen its Risk Reserve and thus, build buffers against future financial market volatility and economic shocks.”
The bank’s Risk Reserves to cushion against unexpected losses arising from adverse financial market conditions stood at RM120.85 billion or 20 per cent of total assets following the transfer of net profits for the year.
The remaining RM2.75 billion (2021: RM5 billion) in net profit will be paid as dividend to the Government, it said. - Bernama