Lending conditions to remain difficult

Press, Volume CXIV, Issue 33626, 30 August 1974, Page 12

Lending conditions to remain difficult

Bank lending was slightly less in July, the New Zealand Bankers’ Association says in its monthly statement. A drop of sl3m in advances and discounts was only partly offset by growth of s9m in term loans.

Utilisation of credit limits is still rising. At the end of July it was 74.9 per cent compared with 71.7 per cent in 1973 and 66.8 per cent in 1972. In dollars the increased utilisation of limits accounts for an increase in lending of s6sm over 1973, and sl6sm over 1972. Total credit limits declined sl2m, to $2047m. Concurrently with July’s small drop in total lending, there was a net increase in deposits of slBm. Interestbearing deposits became, for

; the first time, more than 50 f per ■ cent of the trading t banks’ total holdings of t deposits. But non-interest-i bearing deposits fell. Because the rise in inter- > est-bearing deposits' is comi mon to other deposit-taking , institutions, it may mark the 1 beginning of preparations to , meet income-tax payments in September.: The tax payi ments will, of course, keep , utilisation of credit limits at i a high level, and lending ■'conditions will remain very] 4 difficult, the statement says. '