The Reserve Bank of New Zealand paid a dividend of NZ$210 million to the NZ Treasury this year, down from NZ$335 million in 2010, the RBNZ's annual report, released yesterday, shows.The bank reported a net profit of NZ$144 million for the financial year, following a loss of NZ$111 million in 2010.The RBNZ expanded its balance sheet over the year from NZ$26 billion to NZ$31 billion, largely because of efforts by the New Zealand Debt Management Office to pre-fund projected budget deficits at a time of ample demand for NZ sovereign debt. On prudential topics, the annual report notes that "active, as opposed to passive, use of the core funding ratio" - a key liquidity target for banks introduced last year - "is still under investigation".The RBNZ also said it completed "more preparatory work on a range of macro-prudential tools [that] may help bolster financial system resilience and possibly moderate credit cycles."However, the RBNZ said, "Expectations need to be realistic about what can be achieved. None would provide the definitive answer in terms of moderating the credit cycle, but we believe that, used in tandem, a number could potentially contribute to greater stability through future cycles."