FACTS FOR INVESTORS.

Auckland Star, Volume LXVI, Issue 189, 12 August 1935, Page 4

FACTS FOR INVESTORS.

NATIONAL BANK.

RISE IN GROSS PROFITS. FUNDS SENT TO LONDON*. Gross profits of flic National Bank of New Zealand for the year to March 31 last, show an improvement of nearly X 10,000 to £547,278. Expenses of management, including directors' fees, have risen from £392,786 to £414,328, leaving the net income at £132.949, against £135,674. This year's transfer to exchange and contingencies account is £30.000, against £40.000 last year, but nothing is transferred to premises against £10,000 a year ago. The dividend is maintained at 4 per cent, tax free. The board has transferred £500,000 from currcncy reserve to exchange and contingency account to provide for the cost of capital transfers from New Zealand to London, which have been or may be considered desirable. Earnings Compared. A comparative table shows: — To March 31, 1935. 1934. 1933. •C .C hi Gross profit . . 547,278 528,-160 544,403 Brought in ... 106,416 114,742 142,293 Total 653,694 643,202 686,696 Expenses 414,328 392,786 427,954 Exchange and contingencies 30,000 40,000 40,000 Div. amount . . 80,000 SO,OOO 80,000 Div. rate, p.c., t.f 4 , 4 4 Pensions, etc. . .14,000 14,000 14,000 Premises —■ 10,000 10,000 Forward 115,366 106,416 114,7421 The establishment of the new Reserve Bank on August 1 last is reflected in big changes in the balance-sheet. The holding of New Zealand Government Treasury bills and special loan has disappeared. Cash is up from £1,426,034 to £2,669,327, and investments now total £4,194,477, against £2,505,171. The banks note issue has been called in and only £151.763 remains in circulation, against £1.111,224 last year. Deposits are down sharply, from £ 15,595,857 to £13,554,858. Advances are up from £8,924,944 to £9,422,429. Balance-Sheets Compared. A balance-sheet comparison shows:— LIABILITIES. March 31, March 31, 1935. 1934. Capital 2,000,000 2,000,000 Reserve 1,000,000 1,000,000 Currency reserve ... 500,000 1,000,000 Notes in circulation 101,763 1,111,225 Deposit and current accounts 13,554,859 15,505,886 Bills payable 1,368,853 1,313,405 Profit and loss .... 155,366 146,416 Total 15,730,841 22,106,932 ASSETS. Coin, etc 723,369 692,944 Cash and money at call 1,945,958 733,090 Investments 4,194,477 2,505,648 N.Z. Govt. Bills, etc. — 6,503,171 Bills receivable .... 1,165,715 1,551,789 Remittances 219,189 301,916 Bills discounted .... 427,580 323,302 Advances 9,422,429 8,924,944 Property, etc 629,124 630,128 Total 18,730,541 22,166,932 Chairman's Address. In his address at the 63rd annual meeting in London on July 9, the chairman, Sir Austin E. Harris, K.8.E., said, inter alia: —''Last year we transferred £1,000,000 from our reserve fund to currency reserve,thus falling into line with other Australasian banks and providing for the depreciation in New Zealand surplus assets caused by the fall in the rate of exchange. "We have this year transferred £500,000 from the currency reserve to an exchange and contingency account. The repayment of the large amount of New Zealand Government Treasury bills and of the special loan to the Government, both of which items were included in the balance-sheet last year, left us with more money in New Zealand than we were able profitably to employ there, and we decided, therefore, to transfer some of our surplus funds to this side, where for the present there are available more channels for their employment. It is to provide for the cost of these remittances and for any further similar transactions that might be found desirable that we have made this transfer of £500,000. "Our note circulation has fallen from £1,111,200 to £151,800. This is accounted for by the fact that the Reserve Bank has now the sole right of issuing notes, and that our own notes are being withdrawn from circulation as they come back into the banks' hands.

Deposits Not Wanted. "Deposits are down £2,000,000, the decrease being shared by New Zealand and London. With the transfer of funds to London there has been lees occasion for us to maintain our deposits here, while in the Dominion we were for a time obliged to discourage fresh deposits owing to the impossibility of profitably employing them, but with any further improvement in trade and an expansion of our business the position should gradually be remedied. "On the assets side coin, bullion and notes show a slight increase. British Treasury bonds and securities show a subtantial increase of £735,000. Advances show a small but satisfactory increase of £500,000, and I am pleased to say that this upward tendency appears to be maintained. "We are able to show an improvement in net profit of £7000. Gross profits are £20,000 better, but Dominion income tax, under the heading of expenses, has absorbed the whole of this improvement. Income tax is still a very serious burden on the banks in New Zealand, but we are not without hope that before long the method of assessment will be placed on a more equitable and less onerous footing. "We propose to pay a final dividend in sterling at the rate of 4 per cent per annum, free of income tax, and the carry forward is £115,400, as against £106,400 last year. Returning Confidence. "The past year has again been a very difficult one for bankers, and we have been hard put to it to find profitable employment for our funds. The signs of returning confidence, to which I referred at our last meeting, became more apparent during the year, and I am pleased to be able to tell you that trade conditions within the Dominion evince a somewhat more healthy tone, so that we are encouraged to hope that we have seen the worst. However, conditions are still far from normal, and we are not yet out of the wood. Any further substantial improvement would seem to be largely dependent on a corresponding improvement in overseas prices for New Zealand's primary produce."