BANK OF N.Z.

Auckland Star, Volume LXXI, Issue 146, 21 June 1940, Page 4

BANK OF N.Z.

[ACCOUNTS REVIEWED. ANNUAL STATEMENT MADE. PAYMENT Or DIVIDEND. (By Telegraph.—Press Association.) WELLINGTON, this day. The annual meeting of the Bank of New Zealand was well attended, and was presided over by Mr. R. W. Gibbs in the absence of the chairman of directors, Mr. A. T. Donnelly, C.M.G., through illness. Mr Gibbs read an address prepared by -Mr. Donnelly, in which'it was stated that long-term mortgage debenture stock at £500,000 showed a reduction of £107,050. Stock for this amount fell due in New Zealand on August 1, and was repaid. The balance of £500,000 was repayable in London on November 15, and will be repaid. Deposits, fixed and free, at £36,422,293, showed a net increase of Fixed deposits, however, were lower, and the increase in free deposits was therefore greater than the net amount shown. Coin, Reserve Bank notes and deposits with bankers were £10,825,108, showing an increase of £3,147,190, due principally ■to heavier balances at the Reserve Bank, which, at- March '31, amounted to £7,438,000. Among the factors contributing to larger Reserve Bank balances might be mentioned the earlier receipt of the proceeds of Dominion produce owing to its sale to the British Government, and also to the additional use of Reserve Bank credit by the Government for housing and other purposes. These factors also had a bearing on the increase in free deposits referred to aibove. Securities in London. Money at call and short notice, Government securities and other securities in London amounted to £6,066,363, an increase oi £1,675,000. Although an increase was shown, it should be understood that the bank had substantial commitments and liabilities against these funds. British Government securities, in which the ' bank's reserve fund of £3,575,000 was invested, were included the above item. New Zealand Government securities, £8,530.195, showed an increase of nearly £3,000,000. of which £1,000,000 represented an interest-free loan to the Government for the period of the war and six months thereafter, and the balance was mainly of short-dated stock, purchased to employ some of the bank's surplus funds. It was reasonable to at-sume that as time went on the bank's investments in Government securities would increase considerably. Policy to Assist Industry. It always had been and was still the polity of the bank to support industry and agriculture to as large an extent as possible, and to assist the Government in its task of financing the war effort. Advances and bills discounted, £22,953,595, were lower by £4,243,144. This substantial decrease reflected altered conditions. Applications for new advances had not kept pace with reductions effected by customei-s in overdrafts. Difficulty in obtaining overseas stocks, due to import control and the war, had resulted in heavy reductions of traders' stocks, with consequent decreases in overdrafts. Also owing to uncertainty as to the future there was a genera] tendency among customers 'not to borrow in order to take up new investments for fresh enterprise. Fortunate Legal Decision. Mr. Donnelly's statement mentioned that a further 5 per cent dividend was being paid out on ordinary shares, making 10 per cent for the year. He explained that the actual trading profits the year were insufficient ro pay the usual outgoings and maintain the dividend at 10 per cent, but a decision given in the bank's favour by the House of Lords in a long-standing action with the British Inland Revenue Department had resulted in a substantial sum previously set' aside to provide for British income tax being released and taken back into the profits. The dividend on all classes of shares would be payable at Wellington tomorrow, and at branches on receipt of advice.

The motion for the adoption of the report and balance-sheet was carried without discussion.