The Press. FRIDAY, SEPTEMBER 20, 1889.

Press, Volume XLVI, Issue 7420, 20 September 1889, Page 4

The Press. FRIDAY, SEPTEMBER 20, 1889.

In a recent article we mentioned the fact that during the twelve months ending June 30th last there had been an increase o! deposits in the Banks doing business in New Zealand of about £360,000. Taking the Banks separately the following are, in round numbers, the actual figures: —In th* case of the Bank of New Zealand, there was an increase in cash deposits of £10,000, a decrease of £115,000 in fixed deposits, and a decrease of £155,000 in Government deposits. In the case of the Union Bank of Australia, the cash deposits showed an increase of £42,000, and the fixed deposits an increase of £153,000. The Bank of New South Wales showed an increase of £33,000 in cash deposits, and £180,000 in fixed deposits. In the case of the Bank of Australasia the position remained exactly the same, there being a falling off in cash deposits of £7000 and an increase of £7000 in fixed deposits. The National Bank of New Zealand showed an increase of £15,000 in cash deposits and £89,000 in fixed deposits. The Colonial Bank of New Zealand disclosed a reduction of £10,000 in cash deposits and an increase of £117,000 in fixed deposits. The total increase of cash and fixed deposits was, therefore, £646,000, and the decrease £287,000, leaving a balance of £359,000 as the increase in twelve months. But it will be observed that there was a reduction in the Government deposits during the period under notice, which ought, for our present purposes, to be eliminated. When that is done, it will be seen that the public of New Zealand, apart from the Government, had to their credit in the various Banks, over £500,000 more en June 30th last, than they had twelve months previously. This result bears out what we have already said was the experience of those in a position to judge of the financial position of a very large number of our settlers. The profitable results of the year's operations have enabled many amongst our agricultural community to get rid of liabilities which have been hanging over them for years, and in addition, in not a fow instances, to put money aside for future use. Turning to the returns dealing with the advances made by the Banks to the public, we find that there has been a very remarkable decrease—a decrease which at first sight might be calculated to produce a somewhat depressing effect. That decrease amounted to £1,269,845. This result, we say, is at first sight somewhat unpleasant. But when all the facts of the case are taken into consideration there is not the slightest ground whatever for alarm or even anxiety. It is the natural outcome of operations well known to the public, and, indeed, fully anticipated a year ago. In order that our readers may compre. hend the position, we give a statement of the transactions of the different Banks doing business in the colony for the twelve months under notice, and in doing so we confine our attention to the two great headings under which advances are usually made by the Banks, namely, bills discounted and overdrafts. An examination of the quarterly statements published in the Gazette shows that the amount lent to the public in the shape of bills discounted and overdrafts was, on June 30th last, £992,000 less than on the same date twelve months previously. Taking each Bank separately the following results are disclosed :— The Bank of New Zealand had reduced its discounts from £1,241,000 to £916,000, showing a decrease, of £325,000. It had also reduced its overdrafts from £6,155,000 to £5,212,000, showing a decrease of £943,000, or a tctal decrease in discounts and overdrafts of £1,268,000. The Union Bank of Australia had reduced.its discounts from £629,000 to £622,000, a diminution of £7000; on the other hand, it had increased its overdrafts from £1,150,000 to £1,179,000, or an advance of £29,000. In other words, the Bank had increased its advances by £22,000. The Bank of New South Wales had increased its 'discounts from! £269,000 to £300,000, and reduced its discounts from £1,604,000 to £1,585,000; the net result being an i increase of advances altogether of £12,000. The Bank of Australasia had bills under discount on June 30th j amounting to £310,000, being a reduction during the year of £28,000, but its overdrafts stood at £831,000, an! advance of £65,000 during the year, the net increase of advances by this Bank to the public being £37,000. The National Bank of New Zealand had £319,000 under discount on June 30th, an increase of £21,000, and £1,172,000 advanced on overdraft, being ;an increase of £99,000, or a total increase of £120,000. The Colonial Bank of New Zealand had £395,000 under discount, a reduction of £7000, and £1,323,000 advanced on overdraft, an increase of £92,000, or a total net advance to the public of £85,000. Summing up theser figures we find that the amounts advanced on June 30th last by the Banks to the public in the shape of discounts and overdrafts, had increased or diminished in the twelve months as follows :— Bank of New Zealand decrease £1,288,000 Union Bankof Australia increase 22,000 Bank of Newfiooth Wales „ 12,000 Bank of Australasia „ 87,000 National Bank of New Zealand „ 120,000 Colonial Bank of New Zealand „ 85,000 The above figures speak for them* selves. The diminution of advances to the public, to which reference has been made in the Banking Record, is largely accounted for by the fact that: up to June 30th last tbe Bank of New Zealand had been working lor nine months under its reformed administration —an administration whose principal duty was to clear from the books of the Bank" an admittedly large number of bad and doubtful securities which, up to the date , when the change took-place, had been . carried forward as available assets.

The above iac% we cay, to a, huge extent accounts for the diminution m the volume of advances on June dUtu as compared with the figures for the corresponding period a year ago. In every inatanoe, except that of tne Bank of New Zealand, there has been a j slight increase, although we admit the j increase has nob been equivalent to the amounts lent by the public to the I Banks. Nor has the cash reserves been increased. The Bank of New Zealand held £67,000 less, the Union Bank £4000 more, the Bank of New South Wales £156,000 less, the Bank of Australasia £8000 more, the National £60,000 more, and the Colonial £19,000 less, or a total of £170,000 less for all the Banks. The conclusion is that a certain amount of Bank capital has evidently been invested outside the colony m some shape or other. Aβ this has been done without any restriction upon the legitimate requirements of the trading community of New Zeaiand, it is another sign, it appears to us, of the improved financial position of the bulk of our settlers.