BANK PROFITS.

Auckland Star, Volume LIX, Issue 173, 24 July 1928, Page 10

BANK PROFITS.

MR. HOLLAND'S CONCLUSIONS DISPUTED BY AUTHORITY. (By Telegraph.—Own Correspondent.) WELLINGTON, Monday. The conclusion drawn by Mr. H. K. Holland, M.P., that the Associated Banks made a profit of £120,000 by the addition of half per cent to the deposit rate, and a similar increase in the overdraft rate, is disputed by a banking authority. For the year ended June 30, 1927, th<» average of advances was £50,288,000. and. the addition of A per cent on the minimum rate would have given an increased profit of £251,440, said the authority. But the position was that at June 30, 1928, the advances had contracted to £47.5 IS.OOO, a decrease for the period of £2,770,000. so that the profit was decreased by £193.900, represented by loss of interest thereon at 7 per cent, giving a net increased return to the banks of only £57,540.

As to fixed deposits, these at June 30. 1927, amounted to £21.2.15.000, and } per cent additional paid on them by the banks represented an increased payment, or decreased profit of £106,275. The fixed deposits, however, increased during 1027-28 until at June 30 they were returned at £25.182.000. an increase of £3,927.000. the interest on which at 5 per cent represented a decreased profit to the bank« of £190.250. The loss due to the increased amount paid in the rate for fixed deposits wa« in all £302,525.

Increased profit®, hnwovor, from the enhanced overdraft rate for the vear ending Juno 30, 1027. amounted +o €57.540. This sum. deducted from £302 52-~. leaves a deficit to the hank® of £244.0®/;, instead of the extra profit of £120.000, winch Mr. Holland if reported to have said they marie.