ANNUAL REPORT NORTHERN BUILDING SOCIETY

Press, Volume CVI, Issue 31226, 25 November 1966, Page 17

ANNUAL REPORT NORTHERN BUILDING SOCIETY

Assets Exceed £4l Million

Record Income Of £12.8

Million

. The Chairman of the Northern Building Society, Mr W. L. Wyber, moving the adoption of the Report and Accounts for the year ended August 31 at the Annual Meeting on November 23, said in his address to Members:

Ladies and Gentlemen, As Chairman of the Board tt is again my privilege to address you and to move the adoption of the Annual Report and Accounts for the year which ended at 31st August, 1966. Once more it has been a year marked by sound progress with some outstanding results. Sales of new shares passed the 300,000 mark and our assets exceeded £4O million for the first time.

Though the Society has passed these milestones, progress has not been achieved purely for the sake of making records or presenting larger figures. Your Board is always conscious of the rights and interests of existing members. New share sales targets are set each year at a sensible level suitable to the Society’s size and strength, and the

consistent policies of adding to reserves on the one hand and of investing a prudent proportion of members’ funds in readily realisable trustee investments on the other, have been continued.

These policies ensure that all members, new and old, whether investors or borrowers. may look forward to a continuation of the benefits they have been promised. Decimal currency is to be introduced during next year and we believe the time is opportune to amend the Society’s proposition by changing the rate of contribution on new shares to 5/per week, a figure which a recent survey has proved to be the most popular savings unit.

This change will enable the Society to increase monthly ballot and tender appropriations to £lO,OOO each, yet reduce substantially the j number of shares in new groups. Recording will be greatly simplified with economies in overheads, resulting in improved profits for all) members. The rights of present members will, of I course, not be affected in anyway. INCREASED MEMBERS’ SAVINGS Receipts for the year 1 amounted ,to £12.789.000—an ' increase of well over £ll million. This includes contractual savings of £5,495.000 made by members on their investing shares. New and existing members took up thei record number of 316,000 shares during the year which will generate new savings capital exceeding £8 million for these members during the next ten years. The most effective savings plan is one that is systematic or contractual and there is no better or more profitable method for regular savings than membership in this great co-operative institution. Whilst their savings are growing steadily, members have opportunities of substantial gain by means of the ballots for interest-free loans. If these loans are not required to buy or build a home or pay off an existing mortgage,! they can be sold immediately: through the Society for cash J without in any way affecting the members’ savings. For example, a member saving at the rate of £1 a week and drawing an interestfree loan of £4OOO can immediately sell his rights to it for £lOOO tax free. His savings of £1 a week remain intact and may be withdrawn in full at any time after ten vears with a share of profits. Within ten years an immediate refund is permitted on death and the Society also has generous provisions to take care of sickness or hardship. During the year, the substantial sum of £916,752 was paid by the Society to members on the sale of ballot loan rights and by way of profits or bonuses on the maturity of share investments.

ADVANCES TO MEMBERS The past year has seen an intensification of credit restrictions. These have increased the already strong demand for mortgage money. The Society, however, has again made a notable contribution to the alleviation of this national demand because it is continuing as usual to lend all its available funds. During the year over £8 million was advanced to members, principally for home finance and also for personal loans on the security of mem-

bers’ shares. For some years now the Northern Building Society has made available more finance for homes in New Zealand than any other organisation except the State Advances Corporation. Indeed, in the past 20 years the combined savings of members have resulted in the investment of over £6O million in what is surely one of the safest securities of all—the homes of members throughout the length and breadth of New Zealand. It gives me great pleasure to report that a very large number of these loans have already been repaid, enabling many Northern members and their families to enjoy the security of a debt-free home. The new shares sold were well in excess of shares withdrawn in the normal course of termination or groups reaching the 10 year point, with the result that there are now over two and a quarter million live shares. The investment of £33,716,000 on these shares represents the thrift of more than 180,000 members in every part of New Zealand. PUBLIC CONFIDENCE JUSTIFIED

I Also part of members’ funds are realised profits of £5,298,000 and reserves of £1,884,000, bringing the total to £40,899,000. The Society’s assets of £41,478,000 are nearly equal to the total assets of all the other societies in the country, a striking measure of public confidence in our Society’s proposition. The two main components of this total are loans on homes and on shares now at ’ £35.665,000 and liquid assets of £4,422,000. I This year four more groups | were added to the previous 22 I that had been terminated when all remaining members received their interest-free ballot loan rights. Twelve more groups are in the process of similar termination, a record unsurpassed in New Zealand. We believe it to be good terminating building society practice to make sure that every member prepared to maintain his membership obtains an interestfree loan or its tax-free cash equivalent. Therefore, a parent who takes out Northern shares for his children when they are young can be sure that, at about the time they marry, they will have, interest-free, the whole or a substantial part of the mortgage needed for a home. BENEFITS FROM NEW LEGISLATION The new Building Societies Act came into force this year. As I predicted last year, few changes have had to be made in the presentation of our Accounts. Your Board has felt the need for a new Act for some time and welcomes this up-to-date legislation. I The previous legislation was | too wide in scope. Building | Society directors are trustees ; of the public’s savings and in work of this kind there should be no room for opportunism or speculation. Under the new legislation 'there will be important and desirable restraints for the protection of the investing public. These will provide safeguards against uneconomic growth, unsound policy and procedures, and misleading information in accounts and publicity material. In addition, provision has properly been made to ensure no departure from the conventional function of channelling the bulk of building society savings into home finance. This new legislation i will improve the stability of the building society movement as a whole in this I country. New Zealand, with well over 300.000 members, is the sth nation in the world in i building society membership in spite of its small populaI tion. Over half of these members belong to the Northern ■ Building Society which has largely been responsible for our country's high place in this field by world standards, j SECURITY AND STABILITY

One of the most important features of membership in a co-operative savings institution should be the degree of safety afforded members’ savings. The Northern’s position is unique because of the incomparable strength of its reserves, its sound liquidity policy and its great stability. By reason of its unequalled success, its resources and its experience, the Northern, which is the acknowledged deader in this field, is best equipped to handle the withdrawal of shares, the termination of groups and all the ' other problems peculiar to membership in building | societies of our kind. As clearly shown by results, ' our Society is able to provide greater benefits for members, and over the years a substanjtially higher yield on their share investments. These and other undoubted advantages of membership in the Northern, coupled with the Society’s policy of practising nothing but the most sound sensible economic procedures, will ensure that it will con- , tinue to be chosen by discrim-

mating people as the most profitable and secure repository for their contractual savings.

During the year the Society was honoured by the appointment of our Managing Director, Mr Watson, as a VicePresident of the International Union of Building Societies. He has been invited to play a leading part at the next International Congress to be held in Sydney in 1968. The Directors tender their thanks to the members for their support and co-operation which they gratefully acknowledge to be important factors in the progress of this great institution and in the confidence it enjoys throughout New Zealand and overseas. I also wish to express the Board’s appreciation to our Managing Director, the General Manager and his principal assistants and everyone of the office staff and membership organisers, also the Society’s Agents, Solicitors, Auditors and Valuers throughout the country. Finally, I wish to place on record my personal thanks to my colleagues on the Board for their whole-hearted cooperation during another busy successful year. I have now pleasure in moving the adoption of the Annual Report & Accounts as audited.

There being no other nominations, the retiring Directors, Messrs. A. G. Gray and J. B. Stewart, were declared re-elected. Messrs Frank Sweeney and Co. were re-appointed Auditors on behalf of the shareholders. A vote of confidence in the Directors and thanks to the ; Staff was replied to on behalf of the Board and the Staff by the Chairman. —P.B.A