TRADING BANKS.

Auckland Star, Volume LXV, Issue 285, 1 December 1934, Page 4

TRADING BANKS.

MONTHLY RETURN FOR OCTOBER INCREASED ADVANCES. DEPOSITS ARE LOWER. A number of important changes arc shown in a summary of the trading banks monthly returns as at the close of business on Monday, October 2!) ; when compared with those for September 24. The returns which are furnished to the Keserve Banlin accordance with section 40 of the lie' serve Bank of New Zealand Act, 1033, wen gazetted last night. The aggregate figures for the six trading banks, expressed in New Zealand currency, are as follows: — CitKDIT — £ (a) Demand liabilities in New Zealand 24,025,030 (I)) Tinit liabilities in New /(■aland -31),045,737 (c) Demand liabilities elsewhere than jti New Zealand incurred in respect of New Zealand business 195.594 (d) Time liabilities elsewhere than in New Zealand incurred in respect ol' New Zealand business 815.095 (j) Notes of own issue in circulation payable in New Zealand 2,200,305 Totals 00,203,701 DEHIT— £ (e) Keserve balances (Held in the Ktf,serve Bank of New Zealanu 12,070,705 (f) Overseas assets in respect of New Zealand business— (1) In London 10,404,570 (2) Elsewhere tlian in London 5,948,511 (g) (1) Gold and gold bullion lieid in New Zealand — (2) Subsidiary coin held in New Zealand 558,300 (h) Advances and discounts in New Zealand 43,539,544 (i) lteserve Hank of New Zealand notes 5,043,024 Totals 81,291,083 The trading banks' own notes in circulation, payable in New Zealand, were further reduced during the live weeks by £509,759, a total reduction since July 30 of £4,013,930. The total note circulation at October 29 was £0,040,908 10/, compared with £0,183,071 10/ on September 24, a reduction of £142,703. The demand liabilities of the trading banks in Xew Zealand as at October 2!) (current accounts, etc.J stood at £24,025,U3O, a reduction of £1,740,290 compared with those on September 24. Time liabilities in New Zealand at October 20 stood at £39,045,737, a reduction during the live weeks of £540,983._ The demand and time liabilities in ' New Zealand totalled £03,070,707, a reduction of £2,287,273. Demand liabilities elsewhere than in New Zealand incurred in respect of New Zealand business were further reduced to £198,594, compared with £5,148,70-4 oil August 27. Time liabilities elsewhere than in New Zealand incurred in respect of New Zealand business totalled £818,095, compared with £822,213 on September 24, a decrease of £1118. Reserve balances held in the Reserve Bank of New Zealand on October 29 totalled £12,070,705, compared with £15,913,540 _on September 24, a reduction of £3,230,781. Total overseas assets in respect of New Zealand business, at £19,443,381, show an increase of £2,502,509, mostly in London, where the assets held total £ 10,494,570, compared with £7,751,171 on September 21. Adva noes and discounts in New Zealand total £43.539.544, compared with £41,603,073 on September 24, an advance during the live weeks of £1,936,471. The ratio of advances and discounts to total deposits in New Zealand at October 29 was 09.03 per cent, compared with 63.05 per cent on September 24, 02.09 per cent on August 27, and 04.25 per cent on July 30. I NEW SOUTH WALES. LAST YEAR'S PROFITS. ONLY SLIGHT VARIATION. The accounts of the Bank of New South wales, for the year ended September 30, which were presented at the annual meeting held in Sydney yesterday, show a net profit of £439.739, an increase of £123 on the previous year. Among the expenses provided for, taxation amounts to £185,811, against £254,217 in the previous year. The year's dividend is unchanged at 5 per cent. To the profit is added £115,590 brought forward, making available £555,335. Interim dividends of 5/ a share Australian currency, paid for the first, second and third quarters of the financial year, absorbed £329,250, leaving £220,085. The meeting approved the directors' recommendation of a final dividend of 5/ a share, requiring £109,750. The carryforward is £116,335. The dividend is payable at the head office, Sydney, today, and at branches on receipt of advice. Following is a comparison of the bank's results for the last three years:— 1932. 1933. 1934. Brought fonv'd £112,903 £114,980 £115,596 Net profit .. . 402,907 439,010 -139,739 ... ~ , £575,030 £554,590 £555,335 Dividend, p.c. 5i 5 5 Amount .... 400,950 439,000 439,000 Carried forw'd £114,980 £115,590 £110,335 Increase in Deposits. Reviewing the accounts, Mr. T. Buckland, president of the bank, said that a decrease of £304,000 in the note issue was a natural result of the establishment of the Reserve Bank oE New Zealand. Deposits had increased by £5,523,000 to £91,840,000, which was partly due to the increase in wool prices last season. The proportion of iixed_to total deposits had shown a very small decrease—striking evidence of the continued disinclination of the public to invest savings in the development of trade and industry. On the assets side, cash holdings had increased by £3,561,000 to £14,396,000. This was due to the continued reduction of the amount of Commonwealth Treasury bills made available for discount, and to the complete withdrawal of New Zealand Treasury bills from the trading banks. The Treasury bill item, £6,455,000, was £3,734,000 lower, and money at short call, £490,000, showed a reduction of £1,730,000. The latter movement was the result of the unprofitably low levels to which the return oil money placed at short call had fallen. Government Securities. To offset the shrinkage in the items mentioned, investments in Government securities. £16,640,000, showed an increase of £4,975,000. "A trading bank cannot view its investments in Government securities as a highly liquid asset unless it can be assured that the central bank will stand ready at ill times to convert these investments into a more liquid form should the needs af the community make such action desirable," said Mr. Buekland. "If an unduly large amount of such investments is held in forms other than Treasury bills, any lttempt by the trading banks either singly ar as a body to turn even a small proportion of them into cash at snch a time tvould be impossible, even apart from the lisastrous effect their action would have an the market for these securities." The -chairman said that bills discounted ind loans and advances were £1,700,000 niglier at £00,932,000, which indicated, a slight improvement in business. An in3rease of £100,000 to £2,400,000 in bank premises was accounted for chiefly b,v the tow building in Melbourne. The balancesheet total was £116,995,000, a rise of £5,483,000. The year's profit represents a return of 2.9 per cent on shareholders' funds, the same as last year, while the proportion af loans to deposits is 72.9 per cent, igainst 75.0 per cent.