KARACHI, Aug 30: The State Bank earned Rs31.4 billion net profit during the last fiscal year ending June 2005, according to its audited annual accounts. The SBP’s annual accounts would be released most likely in October along with its annual report on the state of economy.

The board of directors of the central bank approved the accounts at its meeting on Tuesday in Muzaffarabad. SBP Governor Dr Ishrat Husain presided over the meeting.

The board appreciated the attainment of exceptionally high level of net profit in the fiscal year 2005, says a press release issued by the SBP.

The central bank had earned only Rs6.2 billion profit in fiscal year 2004.

The board decided to transfer Rs21.4 billion, out of the net profit of Rs31.4 billion, to the government of Pakistan and Rs10 billion to the SBP’s own reserve fund. Gross income during the year was Rs48.5 billion. The overall expenditure of the SBP was contained to Rs9.2 billion, which included Rs3.2 billion establishment expenses.

The board noted with satisfaction that the SBP’s strategy to place part of its foreign exchange reserves with external fund managers and strengthen its own internal capacity to manage these reserves had proved successful. As against the interest income of Rs6.9 billion earned in fiscal year 2004 on the foreign reserves, the SBP was able to earn Rs15 billion in the fiscal year 2005 on its foreign exchange reserves —- an increase of 117 per cent. The central bank had placed $3.2 billion out of its forex reserves with the fund managers.

The net interest income earned in FY05 was Rs17.5bn against Rs4.8bn in FY04. The SBP also made exchange gains of Rs13.8bn in the last fiscal year due mainly to 2.5pc depreciation of the US dollar against the rupee.

The press release says that the cumulative profits earned by it during the last six years totalled Rs114.8 billion. The profit earned by the central bank forms part of the government’s non-revenue income and as such provides it a fiscal cushion.