Bank liquidity still improving

Press, Volume CXII, Issue 33032, 27 September 1972, Page 18

Bank liquidity still improving

Bank deposits continued climbing to new heights during August, according to the monthly statement from the New Zealand Bankers’ Association.

In the course of five weeks, interest-bearing deposits rose by $34 million, non-interest-bearing deposits rose by $l4 million, and savings bank deposits continued their modest growth. Total bank lending (advances, discounts and term loans) fell by $l9 million, although credit limits were increased by $33 million. Term lending continued its steady growth, but there was a significant decline in advances during the last three weeks of the month. To some extent this can be explained by the continued inflow of funds from overseas, and the special effect of the final instalment of sheep retention payments to farmers.

However, the build-up of deposits together with increased credit limits and a reduction in advances, may be the first sign of the establishment of a new sea-

sonal pattern, the change being based upon the new September instalment of income tax payable by subsisting companies. Some confirmation of this theory is to be found in provisional esti-1 mates of advances for early ! September, showing a recovery in advances, which approach last year’s level. If this is correct, the swings will be still larger ini August and September next! year, when subsisting com-i panies* September instalment! will be 33 per cent of their annual tax, compared with 10 per cent this year.

TRADING BANK STATISTICS FOR AUGUST (S million) 25/8/71 26/7/72 30/8/72 Liabilities

Deposits bearing interest Deposits not bearing interest Balancing items 417 628 1 561 740 22 595 754 9 ■ ■. ■ 1 1 Uli !■ ■ Assets 1046 1323 1358 Till money 41 44 49 Reserve Bank balances 34 100 99 Net overseas assets .. * 81 76 73 Security holdings 160 324 377 ■1. —i i Total liquid assets 316 544 598 Advances and discounts 701 711 687 Term loans 29 68 73 ■■ ■! ■ — ■ ■ 111 ■ i — ■„ 1046 1323 1358 Unexercised authorities* 319 387 439 Total credit limits * . „ 1020 1166 1199 Total Savings Bank deposits 355 368 372