Allocation of certain proceeds

Question discussed at the 2007 general meeting

If the National Bank carries out a write-back of provisions for various risks, or if it realises any capital gain on the sale of property or BIS shares, the entire proceeds accrue to it.

Effectively, this is not to do with proceeds from profit-earning assets that must be shared with the sovereign State in accordance with the so-called 3 p.c. rule (Article 29 of the Organic Law/Article 53 of the Bank’s Statutes). Nor is there any article, like Article 30 of the Organic Law and Article 54 of the Statutes on capital gains realised on gold, that would rule out these profits being shared out among the shareholders.

On the other hand, the distribution of the Bank’s annual profits (after tax) must take account of Article 32 of the Organic Law and Article 49 of the Statutes, which stipulate that, after deducting the first dividend, an initial charge to the reserve, and the share of the profits allocated to the staff or to institutions in its favour, a preferential share of one fifth of the remaining profits shall be allocated to the sovereign State.