C.B.A. profit in N.Z. much lower

Press, Volume CXV, Issue 34026, 15 December 1975, Page 20

C.B.A. profit in N.Z. much lower

GVetc Zealand Press Association)

WELLINGTON

The net profit of the Commercial Bank of Australia, Ltd, from its New Zealand trading banks, fell 44.0 per cent to $798,557 in the year to June 30, the New Zealand manager (Mr AV. J. Gough) says.

The return on total funds employed was 0.4 per cent compared with 0.8 per cent in the previous year. The result was reasonably , satisfactory in the light of economic and banking conditions experienced during the year, Mr Gough says. Increased preference for interest-bearing deposits over current account deposits, as a customer reaction to high inflation rates, the effect of inflation on salaries and administrative costs, where increases in excess of I 30 per cent were encoun-; tered, and a reduction in international income, because of lower foreign exchange margins from July 1974, caused the profit fall, he says. Deposits, bills payable, increased $11.9m to $183.7m. Most of the funds avail-

able for lending were directed to the priority rural ’ and export sectors, and to those areas where assistance was required to maintain production and! employment. Mr Gough expects 1975/76’ to be a difficult year. He expects total funds to increase: at a greater rate than in 1974/75, but this would be offset by continued restrictions on lending through [ tight government credit pol-[ icy. At the same time, substantial increases in salaries and. administrative costs would: [have to be met, and this' [would place even greater; [pressure on profitability, he [says. [ The Commercial Bank [Savings Bank CN.Z.) Ltd, [published separate accounts,

and its figures are not included in the above results. Its net profit for the year was $189,878, but assets at June 30, exceeded s3sm. The C.B.A. group has reported an operating profit of SAustl 1,751,000 for the year to June 30, which was 26.9 per cent higher than last year. Stockholders funds totalled sAust9s.6m.