Prudential found funds hard to get

Press, 21 February 1978, Page 20

Prudential found funds hard to get

“The state of the New Zealand economy, particularly the lack of liquid funds, adversely affected the Prudential Building and Investment Society of Canterbury,” said the chairman (Mr N. H. Buchanan) in the annual report for the year to December 31.

“The year was a difficult one for permanent building societies with moneys for deposit in short supply, and societies having to compete with others wanting funds. “For the Prudential the result has been higher payment for deposit moneys, but even this did not gain us the deposits which we could and would like to i have used in lending to home buyers and builders. “In spite of this, the Prudential came through the year well, and shareholders can be satisfied with the results,” said Mr Buchanan. The total of the society’s mortgages passed S3M for the first time, and shareholders’ funds increased 4.35 per cent. A new issue of “A” shares was decided against, but “B” redeemable share capital increased $27,500. Dividends were increased on both “A” and “B” shares. “The interim dividend on the ‘A’ shares was in-

creased one per cent to 6' per cent, and the full profit for the year fully justified a final dividend of 7 per cent making a total of 13 per, cent (compared with 11J per! cent previously)” said Mr! Buchanan.

The directors believe that' they will be able to maintain’ the same rate of dividend in' 1 1978, but do not deem it wise to make forecasts in| these times of economic i change, the report says.. I 1 Dividends on the “B”, redeemable shares were increased to 10 per cent for,' one year, 104 per cent for 2 years, and if per cent for 3p years. “With the absorption of, the Christchurch Mutual ;< Building Society into the New Zealand Permanent j. Building Society, the Prudential has become the largest Permanent Building Society functioning exclusively in Christchurch,” said Mr ; Buchanan. In 1977 the Society loaned 1 to 59 (70 in 1976) home ' buyers and owners a total of $642,750 ($707,040 in 1976). : The average loan was $10,894 ($lO,lOO in 1976). 1

The total in the mortga"e account increased $289,753 to $3,255,717. The society maintained its holdings in Government stock at $293,766 but bank deposits dropped $60,000 to $200,000. The total amount received

in interest from mortgages ;and other investments inI creased $56,541 to $340,536. As reported the net profit .for the year to December 31 rose $4050, or 2.8 per cent Ito $146,983. The profit was after an increase in interest expenses 546,804 to $156,564. j Total deposits at balancejdate. were marginally lower ]at $2.3M. but there was a new liability, a bank overdraft of $155,301. ■ Other expenses rose 11.8 I per cent to $36,989. The provision for tax was down $240 at $53. Shareholders funds rose $57,108 to $1,369,112, including an increase in "B” redeemable shares of $27,500 to $412,400, and an increase in retained earnings of $29,608 to $279,263. The profit on averag funds was 11.0 per cent.