THE BANK OF NEW ZEALAND

Press, Volume LV, Issue 10107, 5 August 1898, Page 3

THE BANK OF NEW ZEALAND

ANNUAL MEETING.

(press association telegram.) WELLINGTON, August 4. The annual meeting of the shareholders of the Bank of New Zealand was held this afternoon, the president, Mr W. Watson, in the chair. There was a fairly large attendance of shareholders. Mr Watson moved the adoption of the report and balance sheet, and, in doing so said:—" Following the system which was adopted last year, I will first deal with the profit and loss account, and then, as closely as possible, with the assets and liabilities of the Bank, explaining the changes which have taken place. You will see from the circulated balance-sheet that the net profit for the year ended 31st March, 183 d, is £92,400 0a Id. This amount has been arrived at after making full provision for bad debts and writing down the Estates Company's debenture conversion account by £10,132 9s sd. Upon the whole the earning power was not so good, by about £4000, aa in the previous year, which is quite accounted for by the unusual course of Australian exchange with Europe and the low rates which ruled for certain classes of advances. So far as can be ascertained from the present outlook a recovery of the earning power is likely to be made in the current year. Last year our profits, before providing for bad debts, were £125,000, this year they are £121,000. Allowing for the profit calculated as receivable on the London business of the Government which did not come to us, and the losses on certain old accounts which it was impossible to foresee in 1895, it will be found that our estimates of that year, despite the fall in advance rates which has since taken place, were not inaccurate. After providing for bad and doubtful debts a net profit of £74,900 0s Id has been arrived at by writing off the surplus debenture conversion account so as to leave the exact amount due to the Assets Board, viz., £50,000 ac payment for the year, and £24,900 0s Id the arrears in full from the previous year. Turning now to the balance-sheet, you will observe that the capital has 'during the year been increased by £148,901, the calls paid by the shareholders. Of the second call of £500,000 on the reserve liability, the last instalment of which was payable on the 31st March, £393,042 had been collected, the balance of £106,957 remaining unpaid, but further payments of £758 have been made eince the 31st March. The reserve fund is the same as last year. The notes in circulation BDow an increase of £36,408, which is accounted for by the increase in trade, and the higher values of farm produce. The bills payable in circulation are decreased by £167,754, an ordinary fluctuation. The deposits have decreased on the whole by £604,815/ but the Government withdrawals and the London deposits paid off account for this. The ordinary local deposits, both current and fixed, hare remained steady. Other liabilities are lower by £341,516, which was chiefly brought about by the removal of the amount held against* the Colonial Bank "B " accounts. The bills rediscounted show little variation, and require no comment. On the assets side, tho coin and cash balances have decreased by £219,437, but as a set off against this is the increase of £194,000 in money invested at short call in London. A new item of £1,460,309 appears under the heading "Money at short call and short notice bills receivable and securities in London." Thie shows more clearly than before the resources of the Bank available at short notice. The bullion is lowered by £14,942, which is an ordinary fluctuation. The Colonial Government securities have been paid off to the extent of £102,000, and the Assets Realisation Board debentures' account shows a reduction of £800,000, principally by flotation in London, but partly by redemption by the Assets Board. Other *items in the investment account have undergone no remarkable change. The bills discounted are now shown alone, T £heybav.e;>remained. steady for the year, but are not the indication of trade they once were, as the business discount rates for ready money purchases have not been reduced in line with the ordinary interest rates, consequently it suits traders better to borrow on overdraft or otherwise, and pay ready money •for goods, than to give bills. Other advances, and securities, and debts due to the Bank shew a fair increase really, the apparent decrease being more than accounted for by the loan account and money at short call, transferred and marginal, on the reserve held against the Colonial Bank "B" accounts paid in. The estimated amount recoverable on account of the first call has been reduced during the year from £4141 to £1533, «*nd may shortly be expected to disappear. Landed property and premiees show a reduction of £11,000, principally trom the sale of Custom House Quay section for about that figure. It has been stated that the Directors contemplated spending £60,000 on new Bank buildings in Wellington. The statement is entirely -without foundation. The Directors never contemplated spending even as much as £30,000 on a building, and have only been led to entertain the question at all by a consideration of the advantage of having the whole of the departments of the Bank in Wellington working under one roof instead of occupying two buildings and paying heavy rent. . The Estates Company assets, in liquidation, are reduced by £39,623. You have heard it said that we are unwilling to sell the trading concerns, and that we have been offered by a gentleman in Auckland £70,000 for one of the Auckland concerns, the Northern Roller Mills. This statement ie also untrue, and we have . never received an offer of that amount, or anything approaching it, for the property, but we have since had better proposals than that made by the gentleman in question. The Board's policy is to realise on these dependences at the earliest possible opportunity, but while sparing no pains to effect sales at what we are satisfied are reasonable values, even from a buyer's standpoint, we decline to be coerced by the agitation of interested parties into sacrificing properties, by selling them at the ruinously lew prices which have, from time to time, been offered. You may rest eatisfied that we shall remain unmoved by clamour, and that so long as your interests and the colony's interest in the affairs of the Bank continue in our keeping, we shall pursue that policy which we have marked out for ourselves as proper to be followed. If buyers come forward to negotiate in a reasonable spirit for the acquisition of trading concerns,, we venture to affirm that these accusations of unwillingness ito sell will be promptly disproved. So far as our experience has gone this policy has been fully justified by the results, for not only have we secured satisfactory profits by working, but such realisations as have been brought about have been effected at prices in come cases far in advance of thos& originally offered. We are now in treaty for the sale of several of tbe more important or the trading concerns. As already stated, the Estates Company debenture conversion account is reduced by £10,132, the Colonial Bank property and premises account is reduced £3949 by sales, and the goodwill account is unaltered." The Hon. W. Johnston seconded the motion. Mr George Allen said he had no desire to criticise the balance-sheet, but he noticed that the sum of £74,900 was placed to profit and loss account, and as the shareholders were led at the half-yearly meeting to expect a dividend, he would like to know, in the face of this large sum, why a dividend could not be paid. He repeated he had no wish to adversely criticise the balance-sheet, as he believed tbe Directors were doing their very best for the Bank. Mr Watson replied that the first half-year showed a greater profit than the succeeding term, and although the Directors expected the profits of the first half to be maintained, for the reasons he had already explained in his address they had fallen off, the result being that they only "had £10,000 more than was required, and they thought it better to decrease the debenture conversion account, under which, arrangement that amount appeared on the balance-sheet as an asset. Most of tjhe £74,900 had gone to the Assets Realisation Board. Mr T. W. McKenzie said Ministers bad wry little sympathy for the poor eh«*

holders, who had been denied the right of doing what they liked with their own property. The capital of the Bank had been, swept away, and the shareholders had been called upon to pay twothirds"of their reserve liability. He considered the shareholders had great cause for complaint in regard to the alteration of the management of the Bank, particularly in connection with the abolition of the office of President. It was acknowledged that the Bank was now \ doing well, and as the President must have contributed to this fortunate state of affairs, he did not understand the reason for his removal. The Government, through the President, had very material representation in ■ the management of the Bank, and these I alterations had been made without consult- j ing the shareholders, who had had no say ; in the matter. The way in which the; Bank's affairs had been "discussed in the | House and by the Press could do the insti- ! tution no good, and he asked whether there j was to he any finality to this condition of tilings. The shareholders were like a sucked ; orange, Mr McKenzie went on to contrast! State control in New Zealand with private i enterprise which managed similai institu- j tions in the Old Country, and remarked that the Government evidently wanted the Bank for voting power and political influence, which element must tend to bring the Bank down. Every session wild statements and mysterious utterances were made in the House with regard to tilie Bank's affairs, and no financial institution could expect to succeed while this went on. He was sorry that this was so, as many persons had been ruined through the Bank of New Zealand in the past. He believed the President had done his very best for the Bank, and he wanted to know why he was being removed. He criticised the action of tie' House in fining Mr Watson £500 foi what had practically amounted to a refusal to divulge the private business of the Bank, and he wanted to know who paid that money, because it had gone to add to the surplus of the Government. He hoped a fair opportunity would be given to the Directors to do something with tho little that was left to the Shareholders, who had already suffered enough, and the Directors should see that justice was done to them. Air Watson said he was greatly obliged to Mi- McKenzie for liis kindly sentiments towards him. He knew by the medium of the reports in the public Press as much as he (Mr Watson) did as to the motives that' had actuated the Government in making the recent changes in the management. His sympathy was with the shareholders to the fullest extent, and he would like to see them get more consideration than they received at present. He considered the Bank had good prospects, and as showing the confidence he had in its welfare he might say he had purchased some shares himself. With regard to the fine of £500. the Directors had decided that he could not give the information required, and ho had had to submit to the fine. L.he money did not exactly come out of the funds of the Bank It came out of the money the Directors had a right to draw from the Bank, so that, properly speaking the £500 did not come out of the t j 5 l ad unsu cce3sfully appealed for a refund of the money. .. Mr P. Coffee asked whether,-.in the Directors opinion, there would be any finality to the banking legislation? He considered the balance-sheet proved what the President had done for the Bank and the shareho ders. Was this legislation goins to assist the Bank? The Bank of New Zealand was now a political football, and the shareholders were kicked about all over the place. He considered the shareholders had made a mistake in accepting Mr John Murray s offer in the first instance. He strongly deprecated the way in which the Bank was treated by a section of the House, and the whole thing was a scandal and a shame If they would only leave tie Bank severely alone to work out its own destiny, he behe ™* it had bright prospects. Mr Watson said he was sorry to say he could not answer the question as to whethe? £ W ?i d benefit the Bank « to* he hoped it would. The Government and the House evidently thought it would. b ft £™ +vf hc jl der to a case which was before the Court recently at Dunedin, and was understood to complain that the Directors of the Bank of iTew Zealand had paid calls which another man had been adjudged liable for. Hβ also added that the two companies concerned in the case had . J* 6, * the . means of robbing the Bank of hundreds of thousands of pounds. Mr Watson said the shares were held in trust, and the Bank had to deal honourably with the trustee. Mr T: G-. Macarthy (one of the Directors of the Bank of New Zealand) said the Directora had got all they could from the gentleman referred to that belonged to the shareholders. V The motion for the adoption of the report and; balance-sheet was then put and carried unanimously. ' _Mr Allen moved t*e re-election of Messrs W. Boofch and T. G. Macarthy as Directors, and spoke of them as good officers." . The motion was agreed to unanimously. Mr Booth, in returning thanks for the confidence that had been expressed in Mr Macarthy and himself, said that Mr John Murray had asked them to go on the directorate of the Bank four years ago, and from time.to time they had received expressions of confidence from the shareholders. What they had done could be judged by making a comparison between the balance-sheet of the Bank then and now, and he might add they had done their very best to conserve, the interests of shareholders,' and they would be glad to do as much in the future. The shareholders could rely that the business of the Bank was in a thoroughly sound and j healthy state. He refuted the contention' that the Wellington district had been specially favoured by the directorate, and said the only thing that could suggest this impression was the fact that the progress of settlement in the Wellington district had created a very large and profitable business for the Bank. Another contributing fact was -that, the high prices which had ruled for produce in the South had made pro-r ducers independent of the banking institutions. The. directorate had acted fairly to all portions of the colony. With regard to the reference made by a shareholder to a Southern company's transaction, he might i say that the case was a relic of the commercial deformities the present Directors had found on the books of the Bank, but it would be agreed that all engagements must be honourably kept. Mr Watson said as this was probably the last time he would meet the Directors, he would like to propose a vote of thanks to the staff. He paid an especial tribute to the work of the small branch managers, and said the country staff had kept the splendid business of the Bank together. borne of these men, who were earning £200 or £250 ' per year, would command salaries of £700 or £1000 if their services were in a larger sphere and adequately remunerated. They were extremely zealous in the Bank's interests. No one knew better than he did how they had worked for the Bank. • The motion was carried with acclamation. I Mr T. W. McKenzie referred to the efficient manner in which Mr Watson had discharged the duties of President. He did not think the President's salary had been too large under the circumstances, and he was thoroughly satisfied with the way in which Mr Watson and the Directors had conducted the Bank's affairs. Mr Watson said it was gratifying to hear such kind things from the shareholders, especially after what had been said in the House. Mr Tegetmeier having returned thanks on behalf of the staff, the meeting conclnded.