Bank lending up sharply
(N.Z. Press Association)
WELLINGTON, December 26.
Lending by trading banks increased sharply in November, mainly under the impact of tax payments early in the month, said the Bankers’ Association today.
Advances and discounts rose ssBm in November, compared with onlv s6m in October. But the rate of increase in term loans fell— November’s increase was S9m, compared with s24m in October. EXPORT GROUPS
“In addition to the influence of tax payments, there appears to be some concentration of the increase in lending in the seasonal export industries. “Reserve Bank analysis of bank lending in mid-Novem-ber showed that all seasonal export groups (except meat freezing companies) had in-
creased their use of bank credit in the two previous months, net growth being $23m," the association said.
“November’s banking statistics are, however, characteristic of a credit squeeze.
“Lending, having increased mainly under the influence of tax payments, has been slow to fall away from the peak.
“The increase in lending (s67m) has been accompanied by a fall (S4ffin) in liquid assets, and only a modest increase in deposits (sl9m).” During the month use of credit limits increased, to reach 65.5 per cent, compared with 6,3.8 per cent a month ago, and 60.3 per cent a year ago.
“These small percentage increases in use of limits account for s3om during the month (almost half the month’s total rise) and s6sm during the year,’’ the association said. Part of the rundown in trading bank liquidity, and part of the explanation of the comparatively slow growth of deposits, was prob-
ably an increase in the volume and value of banknotes circulating among the public. Early results indicated that holdings of banknotes by the public in the pre-Christmas period had reached record levels, said the association.
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Bibliographic details
Press, Volume CXIII, Issue 33418, 27 December 1973, Page 2
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294Bank lending up sharply Press, Volume CXIII, Issue 33418, 27 December 1973, Page 2
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