Need For Trading Bank Savings Banks Seen

Press, Volume CIII, Issue 30395, 20 March 1964, Page 18

Need For Trading Bank Savings Banks Seen

“Figures just released show clearly the great impact trading bank savings banks have had on the rate of saving in Australia," says the chairman of the New Zealand Bankers* Association (Mr D. M. Arnold) in a statement “The Australian increase in savings bank deposits for the, calendar year, 1963, was 14 per cent, compared with under 9 per cent for New Zealand,” the statement says and continues: "Though trading bank savings banks had easily the fastest rate of growth, the Commonwealth and state savings banks also achieved healthy rates of increase equal to the New Zealand rate of 9 per cent This should allay any fear that trading bank savings banks in New Zealand would cause a serious drain on Post Office or trustee savings bank deposits. “In no year since trading bank savings banks were established in Australia has the Commonwealth Savings Bank or any other existing savings bank suffered a loss of deposits. All have continued to grow, but the popularity of trading banks savings banks has been such that they now have 27 per cent of all savings bank deposits, only eight years after the Government approved their establishment

“The cost aspect of savings bank' operation is most important. It costs the Post Office Savings Bank and the largest trustee bank almost 3s on average to handle a single deposit or withdrawal. This compares with under 2s a transaction for the trading banks, and it is certain that the trading banks could handle savings bank business even more cheaply. “Costs of operation are, of course, even higher for new trustee banks because they require extra buildings and equipment, whereas the overhead expenses of trading banks are already covered. Denying trading banks the right to operate savings banks is thus a costly waste of New Zealand’s resources.

"It is sometimes objected that trading bank savings bank profits would all go overseas, but in fact, latest estimates indicate thafc more

than 80 per cent of trading bank business in this country is owned by New Zealanders. This means that more than 90 per cent of any profits earned accrue either to the Government or to individual citizens. “The trading banks seek no special favours, but simply a chance to compete for the public’s patronage. We ask in tire national interest for the simultaneous removal of restrictions on trustee banks and on trading banks.”