'NEVER STRONGER'

Auckland Star, Volume LXIV, Issue 98, 28 April 1933, Page 7

'NEVER STRONGER'

THE SAVINGS BANK. FUNDS EXCEED £7,700,000, REVIEW BY MR. VAIXEL "It is satisfactory to note that notr withstanding the most trying year in the history of this country the bank has never been in a stronger position," said Mr. H. E. Vaile, president of the board of trustees of the Auckland Savings Bank, in presenting the eightyfifth annual report and statement of accounts at the annual meeting of the trustees this afternoon. "It is encouraging to know that the confidence in the bank, of both depositors and the general public, has increased," he continued. "All those interested in the welfare of this institution and in the encouragement of thrift may wall be proud of the result of the year's work, and of the fact that the general reserve fund has been strengthened by the addition of another£2o,ooo. Lack of Optimism. "Legislation is at least partly tq blame for the lack of optimism on the part of investors and for discouraging thrift, and trustee savings banks have suffered with other concerns in this regard. Among other things, a depositor must spend the whole of his saving*! before he can take advantage of unemployment relief. While some restriction is necessary, surely a maximum bank balance of, say, £25 would cause no I hardship to the community. ! "Despite all protests, the interest rate to depositors has twice been lowered by Order-in-Council. The mortgage rate has been reduced and a debenture tax imposed—the latter to be superseded by the lowering of the rate on Government loans by the recent conversion. In addition to this, the Unclaimed Moneys Act has been applied to trustee savings banks, and the balances, aggregating £4853 from 8400 accounts, have been i paid to the Government, and for the ' first time in history the trustee banks have been made liable for income tax. Faith In Dominion. "In spite of all these troubles, ample provision has been made for bad and doubtful securities and other contin-. "encies, and we can only hope that this year will see a forward move io restore the resolution to face difficulties with courage and engender more faith in the resources of this fair Dominion. Surely Encouraging the people to save regularly, to spend wisely, would help towards this ideaL "Conflicting opinions regarding thrift seem to be held in various quartets, and there are some who advocate a policy of unrestricted, spending as a. euro for economic ills. To replace ,one of the important factors in character building with a policy of 'spend all' is perhaps hardly to be taken seriously, and it is pleasing to know that our continued efforts to encourage thrift, especially by means of thrift clubs and school banks, have been very ably supported by collectors, headmasters and teachers. Ihe deposits have been affected by the reduced income of the community, which also applies to our general business, but the enthusiasm of our voluntary helpers remains unabated." , Financial Details. Referring to deposits, Mr. Vaile said it had been anticipated that a reduction in the volume would take place, ami the total was less than the previous year by £380,000. Withdrawals were less by £230,000, and exceeded deposits by £88,000; but with interest amounting to £251,000, credited to depositors" accounts, a net increase of nearly £165,000 was shown, which was satisfactory considering that many depositors were compelled by force of circumstances to draw on their reserves. In the investment department mortgages had been increased by £73,000 and debentures by £46,000. Despite the unpopularity of mortgage investments, due to legislative restrictions, the policy of lending on good* revenue-producing securities had been continued, and had materially assisted the community. Further provision had been made for securities in course of realisation and mortgage contingencies. Expenditure during the year on premises and furniture had been written off. The liquid resources approached £1,000,000, apart from Government debentures, totalling over £2,120,000, and revealed a very strong position. An increase of £216,120 in total funds for the year was further evidence of progress and security. Statutory reduction in interest was partly reflected by a decreased in revenue from £372,000 last year to £358,000 this year. Interest credited to depositors was also affected, being £30,000 less. Gross and Net Profit. The gross and not profit accounts were smaller for the reasons given above, the latter having to bear an added charge in the form of debenture, interest tax 'amounting to over £19,000, reducing the profits to £47,780, after providing for depreciation and contingencies. The amount brought forward was £2507, and the appropriation account was thus £50,257. A new factor had now to be taken into account—income tax—and although the trustees were still hopeful that some relief would be given, pro- * vision had to be made in the meantime."' Had the Government given some indication of its policy at the beginning of its financial year instead of the end, it was doubtful if the donations to which the bank was committed to help land settlement schemes would have been favourably considered. The Minister of Finance, however, had promised that income tax would not bo charged on approved donations. The sum of £20,000 had been placed to the credit of the reserve and investment fluctuation account, making the total £720,000, which must be considered highly satisfactory. The amount to be carried forward to next year's accounts was £1937. "The total funds now stand in the balance-sheet at £7,702,063, an increase of £216,129," concluded Mr. Vaile.