Good year for B.N.Z.

Press, 22 September 1980, Page 26

Good year for B.N.Z.

The Bank of New Zealand and its subsidiaries made a consolidated net profit of 513.2 M in the year ended March 31, according to the bank’s annual report. The figure was up 81.2 M

higher than the previous year’s profit of $12.0M — an increase of 10.4 per cent. The report, tabled in Parliament today, said SI6.SM was provided for tax (1979

—514.5 M) and dividends paid or provided for totalled $6.5M (1979 — S6.IM). At the year end the bank's consolidated capital and reserves were 5117.2 M (1979 —SIO7.BM). The return on shareholders' funds was 25.6 per cent before tax (1979 — 4.5 per cent) and after tax 11.3 per cent (11.1 per cent). During the year the bank’s operating expenses rose 23.1 per cent (16.9 per cent), the

report said. The report says that there was again strong deposit growth through most of 1979-80. Total deposits of the B.N.Z. trading and savings banks increased 19.9 per cent to S27OSM. Bank of New Zealand Sav-

ings Bank. Ltd. recorded an increase in depositors’ funds of $3 IM to S2o7M. Interest rates on New Zealand investment accounts were raised progressively during the year in line with market trends. Deposits in ordinary savings accounts, still taken at the statutory 3 per cent interest rate, show a decrease of S6M largely reflecting the encouragement given to depositors by the higher interest rates offering to place savings in investment accounts and in trading bank deposits for terms of 1 month to five years. Mortgage loans increased S24M to SIBOM of which 87 per cent are in housing loans.

■ Taken together, the Bank 'of New Zealand trading and savings bank recorded an increase in lending of 15.7 per cent to $1794M.

The report says that the political situation in some areas, particularly in the Middle East, presented challenges in the handling of trade transactions but, in the main, the difficulties have been successfully overcome. The year also saw the re-

'taxation of official controls over the trading banks’ ability to provide customers i with ' forward exchange projection.

In the United Kingdom, ;the bank’s London branch (has increased its involvement in the domestic sterling market and in markets of other convertible currencies.

A fully competitive foreign exchange and money market dealing operation has recently been established and is successfully promoting the bank’s name in the international banking field. The chairman (Mr L. N; Ross) said: “The past year has seen intensifying competition for deposits, lending and international business, •and new ceilings for interest rates within New Zealand.' These conditions, to the extent that they reflect progressive development of the policv of greater freedoms for the financial community (introduced in 1976, are welcomed by the bank as being in the best interests of New Zealand and conducive to the further strengthening of the bank as a leading member of the financial system.’’