MORE FUNDS.

Auckland Star, Volume LXIV, Issue 82, 7 April 1933, Page 3

MORE FUNDS.

BANKING RETURNS. INCREASE IN DEPOSITS. ASSISTANCE TO GOVERNMENT. (By Telegraph.—Special to "Star.") WELLINGTON, this day. The returns of the six banks trading in the Dominion show a very much improved position for the March quarter as compared with the preceding December quarter, and also show quite a good measure of improvement on the March quarter of last year. During that quarter the excess of deposits averaged £1,232,774, but was higher at the beginning of the quarter and declined during it. This year the excess of deposits has steadily increased, and at March 14 was £6,360,811, while at the beginning of the quarter deposits were only £185,492 more than advances. This increase is due to realisations coming in from our exports, while importation is still on a light scale.

The figures now under review are the averages for the quarter, and deposits averaged £52,670,270 and advances £48,500,274, leaving an excess, of deposits of £4,169,996, compared with £227,595 in the December quarter, and £1,232.774 in the previous March quarter. Greater Excess of Deposits. The principal items in the return compare as follow with those of the immediately preceding quarter:— March December quarter, quarter, 1933. 1932. £ £ deposits, free 17.461.282 35.087.313 Deposits, fixed 35,208.988 35,374,029 Deposits, Government 2.406,603 1.457,057 Note circulation 6,004,52 l 6,016,856 Discounts 565,446 6)7.004 Advances 47.934.82S 49.616,743 Coin and bullion 5,213,756 5.420,060 Government securities 9,668,181 10,103,064 Private deposits show an increase of £2,208,928, all in the free class, and Government deposits have improved £1,039,546. Discount* and advances together are lower by £1,733,473, so that the excess of deposits has an improvement of £3,942,401 in the quarter, and, as shown above, this excess was over £2,000,000 better towards the close of the quarter. Note circulation and metal holdings exhibit light reduction, and Government securities are less, showing that the Government is not leaning quite so much on the banks now. These are the movements for the quarter only and are influenced by seasonal variations. To gain a more comprehensive and satisfactory survey of the situation we now compare the latest figures with those of the corresponding quarter of preceding yeare. Taking first the deposits we find the movements in recent years ds follows:— • March Deposits. Deposits, quarter. Free. Fixed. Total. £ £ £ 1933 .. 17.461,282 35,208,98S 52,670,270 1932 .. 16.998.822 34.466.289 51.465.111 1931.. 18,329.853 32,022,086 51,251,939 1930 ;. 23,095,822 30,097,418 54.003,240 1929 .. 25,736,743 29,608,782 55,345,495 The total of the two classes shows a satisfactory increase of £1,205,159 in the year, and stands at a very good level, taking into consideration the fact that the general level of prices, incomes, interest and charges is lower now. A satisfactory feature, from the banks' point of view at any rate, is that the downward course of the free deposits has been arrested, and these show a fair share of the increase. Advances and Discounts. Turning now to the other side of the ledger we 'find advances and discounts are lower than formerly, comparing as follows for the past five years: March Advances. Discounts. Total, ntr. £ £ £ 1933 .47.934.82S 565,446 48,500,21 4 1932 .49,519,631 . 712,706 50,232,337 1!)31 53,264,390 1,067,844 54.332,234 1930 52,447,136 1,229,643 53,676,779 1929 45,175,304 1,184,440 46,359,744

These figures show that the banks' customers have succeeded in reducing their indebtedness to the banks by £1,732,063 in the last year, and £5,832,000 in two years. This is a very satisfactory achievement, though? it is largely due to curtailment of importation, and consequent reduction of stocks of imported goods. The figures also show that resort to discounting bills has not been nearly so much needed in the last two years. Here, again, the lower scale of prices, etc., probably has some effect on the figures. Best Since 1929. The relationship of these advances to the deposits is the most interesting feature of the returns, as it is this factor that controls the supply of funds available with the banks, and these two main features compare a3 follows for the past seven years:— Excess of March Deposits. Advances. Deposits, qtr. £ £ £ 1983 52,070,270 45.500.274 4,169,996 1832 51.465,111 50,232,337 1,232,774 1931 51,251,839 54,332,234 *3,080,295 1930 54.003,240 53.076,779 326,461 1029 55,345,495 46,359.744 8,985,751 1928 49,958,295 46,070.870 8,887,925 1927 45,528,813 50,800,808 »5,271,995 •Excess of Advances. The present excess of deposits is £2,037,222 better than a year ago, and is the best since 1929. The figures are given back to 1927 to show how the good seasons for exports restored the situation after the poor showing in 1927. The setback after 1929 seriously reduced the supply of funds with the banks, but the latest figures show a very good recovery, and, as stated above, at March 14 there was an excess of deposits of £0,300,81 lj which puts the bank in a very good position. The Government, however, has absorbed a part of these funds by leaning on \he banks to the extent of £9,668,181, compared with £0,597,824 a year ago, whereas the normal amount of Government securities held by the banks is about five millions. Shares of the Banks. The shares of the individual banks in these deposits and advances compare as under:— Deposits. Advances. Banks. £ £ New Zealand 25,973,931 22,339,598 Union 5.816.982 5,645,317 New South Wales .. 5,770,265 5,879,253 Australasia 4,542.333 4.705,270 National '9.137,188 8,530,886 Commercial 1,429,571 1,399,950 The New South Wales and Australasia are the only two showing an excess of advances. Compared with a year ago the Australasia is the only one with less deposits, and each bank shares in the reduction in advances. Government deposits at £2,496,603 are £624,829 more than a year ago, while the banks' holdings of Government fecurities are £9,668,181, ■which, is £3,070,? \7 more than a year ago.

The only other items of any general! interest are the note circulation and) metal holdings, which compare as follows:— Note Coin March circulation. and bullion. quarter. £ £ 1933 6,004.821 5,213.756 1932 5,875,025 6.598,701 1931 5,802,261 6,055,422 1930 6,417,038 6,648,53S 1929 6,370,894 7,263,361 The metal holdings have been reduced by the export of surplus gold coin not required now. The note circulation is better than in the two preceding years, and compares favourably with 1929 and 1930, considering present conditions and the lower range of prices ruling now. Taking a general survey of the position as revealed by these figures it is quite satisfactory. Deposits are up and advauces down, with the result that the banks have nearly three millions more funds than a year ago, and during the March quarter the supply of funds has steadily increased, and it will probably increase further during the now current quarter, with the result that when importers want to stock up again or other calls for funds come, the banks will have ample funds available for all legitimate requirements.