Question discussed at the 2011 general meeting

In the distribution of the Bank's profits for the year 2010, the Council of Regency has followed the reserve and dividend policy adopted on 22 July 2009.

In line with this policy, whereby 25% of the profit to be allocated is transferred to the reserves and whereby "in view of the virtually unavailable character of the reserve fund and the ratio of that fund to the capital, profits to be transferred to the reserves will in future be added to the available reserve", a sum of € 208 million has been transferred to the available reserve.

In evaluating the hedging of the risks incurred by the Bank, the Council of Regency considers the fact that the profit for the current financial year is the first buffer for covering losses. In its evaluation, the Council of Regency does not take account of potential capital gains on property or BIS shares. Similarly, it does not take account of realised capital gains on gold since, as provided for in Article 30 of the Bank's Organic Law, such capital gains shall be entered in a special unavailable reserve account and can therefore not be used to offset a loss.

In accordance with the reserve and dividend policy, a dividend of € 66.45 million (€ 166.12 per share) was paid out for the year 2010. This is the sum of what is called the first dividend, which amounts to 6% of the capital, and the second dividend, which is set at 50% of the net proceeds from the portfolio which the Bank holds as a counterpart to its total reserves ("statutory portfolio"). The remaining 50% of the net proceeds from this portfolio is transferred to the available reserve - together with a share of the Bank's other proceeds -, so that in total 25% of the profits to be allocated is transferred to the reserves.

The reservation of 50% of the net proceeds from the statutory portfolio ensures that the increase in the reserves is funded not only by the proceeds from money market instruments, but also by the shareholders' contribution. Indeed, the reserves form the basis for the dividend yield and no share of the reserves can be allocated, via the balance of the profit allocation, to the sovereign State. According to the reserve and dividend policy, if the Bank no longer deems it necessary to make further allocations to the reserves, the second dividend will be increased to the full net proceeds from the statutory portfolio.