Drop in home loans sign of times

Press, Volume CXVI, Issue 34103, 16 March 1976, Page 20

Drop in home loans sign of times

The drop in the number and total amount of housing loans by the Prudential Building and Investment Society of Canterbury was a sign of the times, the chairman (Mr N. H. Buchanan) says in the society’s annual report.

But the society performed better in this area than many others elsewhere in New Zealand, he says. “The directors give the highest priority to lending for home ownership, but at times —when cash is moving slowly—they have had to restrict lending drastically,” Mr Buchanan says.

“They have also thought it important to increase the society’s gilt-edged investments, and are pleased to report that during the year they did not have to sell any Government stock or break any bank deposits.” During the calendar year 1975 the society lent 67

home-owners a total of $657,700: an average of $9816. The previous year 84 loans were made for a total of $745,800 and an average of $BB7B. The total in the mortgage account increased $217,233 to $2,660,079.

Other investments increased $50,000 with the purchase of additional Government stock, and $60,000 placed with the short term money market. Total investments stand in the books at $571,640. As announced, the net profit increased from $92,347 to $120,446. Two factors were

important in bringing about this result, Mr Buchanan says, the strong growth in deposits, and the successful issue of $125,000 of “A” capital. Deposits rose $134,726, to [exceed s2m ($2,064,643) for the first time. This money I cost the society $8439 more than the year before.

Mr Buchanan says that on the face of the accounts ,the dividend on “A” shares might have been increased, but that the directors preferred to maintain it at 11| per cent and to transfer to general reserve a larger sum

($34,117) than in 1974. “This was a prudent measure because 1976 promises to be an even more difficult year.” “A growth of 12 per cent in assets looks good, but barely offsets the rate of inflation. In my 'last report I predicted a slowing down of growth; this was only slight in 1975 but may be more evident in 1976,” Mr Buchanan says.