BANK OF NEW ZEALAND.

Auckland Star, Volume LIII, Issue 141, 16 June 1922, Page 4

BANK OF NEW ZEALAND.

THE AKITCAI, MEETING 07 SHAREHOLDERS. A PROFITABLE YEAR. (By Telegraph.-Own Correspondent.) WELLINGTON, this day. The annual meeting of Bank of New Zealand shareholders was held tills morning, the chairman of directors, Mr <Jeo. Elliot presiding. Tha balancesheet and report has already received publicity, but the , chairman in the course of a lengthy speech went into the outstanding features of the year's transactions in some detail. FINANCE. The proposed transference of £ 150,000 to the reserve fund will bring the amount of the fund up to £ 1,675,000. The total of shareholders' funds in the bank, including the cany forward, will then amount to £5,480,818. xuese figures do not include the i per tent Government guaranteed stock of £5"). 988 10/6. In the Dominion alone the bank last year paid the following rates and taxes: £ 1 Income tax 342,022 lend tax 18, us Tax on note circulation... 141.004 Rates 11,039 £31:>,20S In order to meet the needs of o-;r customers in the Dominion it was necessary to draw heavily on reserves in London, but the,se have since been replenished. A sum of £50,000 has again been set aside from the year's profits for writing down the bank's properties, but these are considered to be worth considerabiimore than the figures at which they stand in the books. The result of the year's operation*. wae regarded as quite satisfactory, not- ; withstanding a falling off of £145,213, as compared with the previous year's profits. The decrease is largely tha ; result of overhead charges being greater by £110,452, of which £92,745 is in the item rates and taxes. POSITION OF ADVANCES. j The subject of advanoes and deposits was dealt with by tbe chairman at some length. As compared with tht! figures at March 31, 1921, advances, hi- , eluding discounts, show a reduction of ! £5,723,008, but this reduction has not relieved the pressure upon the bank's resources, for it is more than offset by a contraction of £5,799.052 in deposit* in the same period. Between June. 1920 (when deposits in tli« Dominion reached high-water mark) and January last, there was a drop in the deposits of ;no less than 13 millions: at the same time advances increased by 51 million*: the total drawing on the bank's resources being 18i millions. Advances to the trading community are much less than they WPre at the beginning of tho. year: liquidation of thf excessive stocks of imported goods, thai created so much difficulty from f-eijfui ber, 1920, onwards, lias been vigoroi.sh carried out, often at great sacrifice. Tin large measure of support which we ac corded to importers ha; therefore beet, fully justified, and losses in this class o "business have been of 'ittie consequence The lo.v prices for -everal of tin the most important product* or Tim country, obliged primary produ.-crs anc tho6e connected with them to lcar. heavily upon tbe bank. Local body dependence on tlie bank-; has been relieved by suci-e?-fui local issues of loans at a 6 per cent rate. The money could have been obtained in Loudon at a slightly higher cor-t, and in t'.:e interests of tito Dominion as a whole, said Mr. Elliot, it is to be rosrretted tha; the loans were not raised there. Until financial conditions here become more normal, it is important that local resources should remain available for the further development of local industries, and that, when they can do so at reasonable cost.-local bodies should borrO\v in London. AH the banks doing business in the Dominion have found, during the latter half of the year, that withdrawals of deposits have been greater than the reductions in advances; consequently the latest published averages—March, l!»2_' —show the following figures:—Deposits advances K4(i.-l!ii.----314, excess of advances £6,130,025. Thi» is an abnormal and undesirable state oi things. The banks in Western Australia an.! New Zealand are the only one- anions the Australasian and South Afr':-;>:i banks having an excess of advam-r-, over deposits. GENERAL TOPICS. I There has been some controversy, 'said the chairman, as to the wisdom or otherwise of the Government legalising a moratorium on deposits, but it is or..' opinion that, had the Moratorium Art not been passed, many solvent compani • and firms would have been obliged to suspend payment, and a severe financial crisis might have resulted. Coming to the moratorium on mortgages, Mr. Elliot remarked that its various extensions have brought mortgage investment:into disfavour, and higher rates of interest and larger margins of value t'laii were required in the past will undoubtedly be looked for in future. Estimating the prospects of the immediate future, the chairman said that during the next five or six months, a continuance of the present stringent conditions is to be expected—indeedT we shall be fortunate if conditions do not become more acute. Very little money will be coming into the Dominion, owing to the usual seasonal contraction of exports, but there is every indication that by the end of the year, when proceeds of produce become available, a gradual improvement will =et in. Mr. R. W. Kane, who seconded the adoption of the report and balancesheet, spoke very highly of the London Board of Management," with which he had come closely in contact during ft recent visit. WELLINGTON". i!;is day. The report was adopted. Replying to questions, the chairman said he believed tho rates for overdraft in Argentine were 7 to f> per cent in business similar to New Zealand. He could give no idea when further capital would be issued. Mr. John Mill, in proposing n vote ut thanks to the directors., general manager and staff, referred to the question of a State Bank, quoting iir Masscy, and pointing out that it was not in the interests of the Government to institute a State Bank. The Dank of New Zealand. he said, paye annually £600,000 of the Government's revenue." The bank also I employs over 1300 people, ai salaries amounting to £400,000 per annum, and providing a large sum for pensions in old age. T,h e bank could not W- taken from the shareholders without an adequate price, being paid for the concern. The meeting concluded uith an acknowledgment by the chairman and I general manager for the vote of thauka.