How is the income of the National Bank distributed?
The legislature wanted the profits made by the National Bank to ensure its financial soundness as the country's central bank and to help fund its tasks in the public interest. For that reason, the law did not entrust the distribution of the income of the National Bank to the General Meeting, but to a body, the Council of Regency, in which the majority of the members are elected by the General Meeting and who represent the Belgian socio-economic world. The Council of Regency is therefore responsible in this way for balancing the general interests against the interests of the shareholders.
One of the features of a central bank is the existence of rules governing the distribution of income which must guarantee that the surplus of its income in relation to its expenditure accrues to the State in its capacity as sovereign State. The bulk of a central bank's income results from the carrying out of monopolistic activities granted by the State, especially with regard to the issue of banknotes.
Therefore, Article 32 of the Bank's Organic Law provides for a transparent distribution regime that, in case of profit, foresees that the Bank first of all retains the amount required to form reserves, thereafter pays its shareholders, and, finally, allocates the balance to the sovereign State :
Article 32. - The annual profits shall be distributed as follows:
- a first dividend of 6% of the capital shall be allocated to the shareholders;
- from the excess, an amount proposed by the Board of Directors and established by the Council of Regency shall be independently allocated to the reserve fund or to the available reserves;
- from the second excess, a second dividend, established by the Council of Regency, forming a minimum of 50% of the net proceeds from the assets forming the counterpart to the reserve fund and available reserves shall be allocated to the shareholders;
- the balance shall be allocated to the State; it shall be exempt from company tax.
For more details, see the Bank's reserve and dividend policy, as determined by the Council of Regency on 22 July 2009.