A.N.Z. forecasts tight control of credit growth

Press, 17 January 1979, Page 18

A.N.Z. forecasts tight control of credit growth

PA Wellington i A further tightening of the | availability of credit in New j Zealand was forecast by the (chairman of the A.N.Z. ( Banking Group, Ltd (Sir lan I McLennan) at the annual imeeting in Melbourne. | The New Zealand Governiment obviously is concerned (that the substantial injection ■ of funds from its deficit (could fuel a credit boom ;and aggravate inflation and the balance-of-payments (problem. ( Additional pressure on the (inflation rate in 1979 would flow from the recent general (wage order, which resulted in wage increases of around (17 per cent, he said. | Discussing the impact on l

ibanks of- changes in technology, Sir lan McLennan said the extent to which ; machines were likely to rej place people in banking had been exaggerated. In the (A.N.Z.. new technology was not introduced without careful assessment of its effect on employment. Suggestions that recent reductions in the number of people employed in banking resulted from the introduction of new technology were not supported (by the facts. In the decade (to early 19705. the main (period of development of electronic data processing by banks, there was a relatively (high rate of growth in bankpng employment. A more critical and continuing influence on employment in banking had been the level of economic activity. Economic activity has

-ibeen restrained in the last i few vears. and so had the . rate of employment growth in banking, he said. ■i The A.N.Z.. Banking Group 11 would welcome an inquiry Jinto the Australian capital . market, Sir lan McLennan ’■said. ■j He was concerned by the 1 1 inroads other institutions 'were making into markets '|traditionally held by banks. I “A.N.Z. believes it is a '■matter for concern that ' I higher-cost, and in some JI cases less efficient financial - institutions are making in- ; roads into markets tradi'.'tionally occupied by banks," -he said. “The bank would welcome an inquiry into the Australian capital market as it would provide a forum for a wide-ranging, objective asIsessment of the role of 1 banks relative to that of competing financial insititutions. particularly buildring societies. I “The inquiry could also 'examine whether any case j exists for a more direct role by foreign banks tn Australia or for limitations on ji some of the freedom they already enjoy in their substantial indirect penetration of financial markets.” ' A.N.Z. policy w'as to give 'first priority to its principal ‘ and traditional banking func•itions, but it was also con- ' stantly seeking ways of off'setting its limited ability to expand these traditional -activities by diversifying into other aspects of finance >and overseas, Sir lan McLennan said. A final ordinary dividend of He a share is payable on 'January 25, making a total of 20c a share for the year ion capital increased by a 'new issue.