THE BANKING RETURNS.

Press, Volume LVI, Issue 16961, 9 October 1920, Page 9

THE BANKING RETURNS.

» fFHOSI A SPECIAL COIt&ESrONUECT.) "WELLINGTON, October 8. The quarterly banking averages for September again show substantial increases in deposits, but, unlike last year, there is a very big increase in advances and discounts, and a further expansion of tho note circulation. The salient features of tho September returns compared with the figures for the corresponding quarter of last year may be summarised as under:— £ Government deposits (increase) .. 1,532,081 Free deposits (increase) .. .. 0,155*,632 | Fixod deposits (increase) .. 1,e03,1£0 Advance (increaso) .. .. 8,406,071 Discounts (incroase) .. .. 4G1,9G3 Calculation (mcreaao) .. Q G0,250 Coin and bullion (decrease) .. 335,-15! AH classes of deposits have expanded, but it will bo noted that .the increase in the fixed deposits is more than absorbed by the increase shown by the advances o.nd discounts. The three classes of deposits for tho two periods compare as under: — Deposits. Sept., 1919. Sept., 1920. Increase £ £ £ G-overnmenl 5,305,803 7,527,356 1,532,C81 Free .. 20,331.317 36,-186,099 6,155,682 Fixed .. 15,041,568 15,644,693 1,603,125 51,565,190 60,659,078 9,290,883 The net increase shown by tho deposits last year was £6,585,430, so that there is a very much larger gain this year. Dealing with the free deposits, all the banks havo participated m the improvement, as disclosed in tho table appended:— j Bank. Sept., 1019. Sept., 1920. Increase. £ £ £ Vcv Zealand 14,375,90!) 17,042,950 2,667,043 Union .. 3,920,812 4,462,G03 541,791 N. S. "Wales . 3,009,099 4,291,221 682,122 Australasia 3,382,179 3,981,444 599,^65 National .. 4,525,523 5,844,939 1,319,416 Commercial £17,795 . 863,810 346,045 30,331,317 36,486,999 6,155,682 The increase shown by the National Bank is about 25 per cent., and by tho Commercial Bank over 60 per cent. There is an all-round gain in fixed deposits, the aggrcgato increase being equal to slightly more than ten per cent. The figures of the several banks are appended:— Bank. Sept., 1919. Sept., 1920. Increase. £ £ £ New Zealand 7,520,957 8,537,530 1,066,573 Union .. 1,736,317 1,781,056 44,739 N.S. "Wales .. 2,321,055 2,532,527 211,472 .. 1,117,536 *1,123,696 6,16*1 National .. 2,209,9CS 2,411,731 201,783 Commercial .. 135,7C5 203,163 72.33S 15,041,568 16,644,693 1,603,125 The National and the Commercial Banks show the largest perccntapo increases, while tho Union Bank and tho Bank of Australasia appeared to havo discouraged such deposits. Talcing tho frco and fixed deposits for tho September quarter of seven years, we get the following:— Sept.'Qr. Fro© deposit. Fixed deposit. Tl. Dep. £ £ £ 1914 .. 14,172,777 10,828,687 23,001614 1915 .. 17.545,863 11,600,066 29,154,929 1916 .. 19,520,671 12,978,629 82599,300 IPI7 .. 21,557,821 14,139,815 35,707,636 1918 .. 21, £*46,245 14,123,961 35,770 2C6 11919 .. 30,331,317 15,041,563 45,372,883 1920 ; 36,486,999 16,644,693 53,131,692 Since 1914 the toitfil deposits have more than doubled, due to higher values of produce and general inflation. Now we come to the loans or accommodation given by the banks to the public, and the table following shows this: — Sept., 1919. Sept., 1920. Incrcaee. £ £ £ Advances .. 28,785,870 37,191,911 8,406,071 Discounts .. 1,363,904 1,825,667 461,963 £30,149,774 £39,017,803 £8,868,034 The borrowings from tho banks show an increase of £8,868.034, as compared with the figures for the corresponding quarter of last year, while the increase in the fixed and fiee deposits totalled £7.753,807. Thfe banks pre now bejng called upon to provide accommodation for commerce and trade, and the demands are likely to expand, unless, of course, there happens a slump such .as is reported to be apparent in Britain. Owing to the high'prices ruling now, traders require a great deal more capital to do a given volume of trade than was the case in 1914. hence the inflated figures. The advances made by the several banks compare hs under: — Soptn 1919. Sept., 1920. Increase. Bank. £ £ £ Now Zealand 13,751,663 16,442,763 2,691,200 "Union .- 3,923,493 4,882,386 953,893 N.S Wales .. 8,834,518 4,326,528 991,815 Australasia •• 3,365,481 4,741,219 1,375,738 National -. 4,013,987 6,185,129 2,171,143 Commercial 391,633 614,116 222,288 £28,785,870 £37,191,941 £8,406,071 "We get an interesting table by taking the fixed and free deposits, which represent the money lent to the banks by the public, and the advances and discounts; which represent the loans by banks to their customers, as under:*— Excess of Scot. Deposits. Advances, depoeits. Or £ & £. Tfil'l .. 25,001,664 24,462,576 539,086 1916 ' .. 23,164,929 23,348,906 6,806,022 jni,; . 82 699,300 21,677,965 7,921,335 loir 35.707,636 28,415,451 7,292,185 1918 .. 85,770,206 31,646,632 4,123,6*4 Mlft .. 45,372,835 30,149,774 15,223,111 U2O !. 63,131,092 39,017,808 14,113,78^ Bank advances make bank deposit: and the increase shown by the denosits, as compared with last year, ap peara to bo wholly due to bauli ad vanfces. Now we come to pote circula tion, and coin, and bullion. The aggre gates for each of seven years are showi as under:- Coin end ■ September Circulation. Bullion « U %\T .. 2,012,5® 5,623,575 Taig " 2 822,809 7,002,969 191G " -• 4,329,958 7,498,250 IQI7 " .. 5 650,881 9,847,060 \l\fi .. 6,235,344 8,146,793 . t.va "" .. 7,357,048 8,046,071 1920 •• 7,617,238 7,710,617 Tho note circulation exhibits a fur tiier expansion of £230 250, but is les than in the March or Junequnxter o this Tear.. In addition to £/,710,617 ! metal, the banks held £830,693 m lega 1 tender notes. The figures show change . w hioh will require careful watching, to ' the demands for credit are becoming strone and persistent, and must m ' evitably lead to higher- rates of inter 'est. -The new season has only jus 1 begun, and producers must finance th~i ' shipments of wool and meat botho ' which have, indifferent prospects befor s I them. Furthermore, tfiere are the rc ports of unemployment and ajQupip v ' ' nrices in Britain, which J"" 34 - S( ?° 5 or later, be reflected in New Zealant - However, while the Government ,s 6orr " mitted to the expenditure ot sevtr. millions, there can be no actual slum 3 in the Dominion, at least for some tim [ j to come. _____