THE BANK OF NEW ZEALAND.

Press, Volume LXII, Issue 12533, 30 June 1906, Page 8

THE BANK OF NEW ZEALAND.

The proceedings at tho annual mooting of the proprietors of tho Bank of New Zealand yesterday fully confirm ,the highly favourable impression created by the balanco-sheot on which we commented when it appeared. Tho statement made by tlio Chairman, showing tho amounts appropriated out of profits since 189$ towards clearing off deficiencies and paper assets in the balanceshoot, and strengthening tho position of the bank, chows that no less than £1,643,445 has been so applied, after making full provision for every bad' and doubtful debt. This is indeed a remarkable achievement, and is evidence aliko of the steadily increasing prosperity of the colony, and tho most careful and able management on the part of the directors and officials of the bank. No less than £1,235,207 has been paid to the Assets Board in reduction of its deficiency, and tho not result is that according to information supplied by'the general manager, showing the valuations and position as on the 31st March, 1906, the assets now show an estimated surplus over outstanding debentures of £30,822. Section 23 of the Bank of New Zealand Act. 1903, makes provision that on a valuation taken by tho Chief Auditor, and confirmed by the Valuer-General, showing that the assets of the Assets Board are sufficient to meet tho outstanding liabilities, the Government may, by Order-in-Council, declare that the Assets Board shall cease to exist, and thereupon the assets and liabilities of the Board shall vest in tlio bank. When that is done the dividend to the ordinary shareholders of tho bank may be increased, but 60 kmg as the colony is liable on any of the Assets Board's debentures, the amount so paid is limited to 5 per cent. Wo loam from the chairman's statement that the directors havo taken action, in terms of clause 22, to cause a valuation te be made at the instance of tho Chief Auditor, and if this shows that tho assets are equal to, or in excess of. the liabilities, wo presumo that it will be followed by an application to tho Government to take tho necessary steps remaining for tho dissolution of the Assets Board. Of course it will be noted that tho Act leaves tho matter optional with the Government, and it is pretty well-known that the lato Mr Seddon was oppce-ed to the Assets Board being abolished. It remains to be seen what view the new Prime Minister takes of this question. We ourselves are strongly of opinion that the time haa now arrived when the realisation of the remaining assets may he safely and advantageously handed over to tho bmk. A considerable sum per annum will thereby be saved in management expenses, and as it is obviously to the interest of the bank that those assets should bo quickly and promptly realised it is best, we think, that the work should now be placed in its hands. Mr Watson, one of tlie directors, expressed a hope that so soon as tha Assets Board's bonds were cancelled tha dividend would be increased to 10 per cent., so as to recoup the shareholdsrs for some of tho losses they have sustained in the past. Wo see no reason why this should not be dene, as if tho earning power of the bank keeps up the directors would be enabled to pay the dividend named a«nd still build up a substantial reserve. It would be unwise, however, wo think, to sacrifice tho future for a larger dividend

in the present. The most prudent course would be to so strengthen the bank that when the £1,000,000 guaranteed stock becomes duo in 1914 it will be enabled to pay off tho amount with its own resources, aided by additional capital contributed by the shareholders; so as to render unnecessary any further Government guarantee.