More competition for saving dollar

Press, 19 February 1983, Page 20

More competition for saving dollar

PA Auckland Harder economic times had probably spelt the end to the “comfortable days,” for New Zealand’s finance institutions, Association Trustee Banks’ president, Mr Colin Brenton-Rule, said.

A reduction in the' funds trustee banks must invest in Government stock was necessary, he said. Speaking before the opening of the 12 trustee banks' annual conference in Auckland Mr Brenton-Rule said the country’s financial climate was probably the tightest in history. not expected to improve for at least another few months, he added.

“Things have got to change — the good, comfortable days of managing finances are probably over for finance institutions.”

Despite these difficulties trustee bank operations had proved very satisfactory during the last year.

But Mr Brenton-Rule warned that ways of getting a “fair share and more if possible” of the investors dollar would have to be looked at. To achieve, this, the conference would listen to ad-

vice from a number of financial experts including the governor of the Reserve Bank and the director of the Institute of Economic Research. He said trustee banks were given a pretty free run in their operations, even though they were virtually govern-ment-controlled.

But they would like a reduction in the amount they were required to invest in government stock, which was 38 per cent or about $BBO million (the 12 banks have about $2400 million in de•posits). “If they reduced it by one per cent, of $24 million, that money would be avaiable for us to on-lend,” he said. Trustee banks traditionally funded the housing market as well as providing personal and some commercial loans. During the last year, in Auckland alone, the demand for funds had been P/z times that of previous years. They were very conscious of bank technology and had recently introduced a computerised system linking all 12 banks through a bureau in Wellington. An automated system was also being examined which debited a customer’s account

while he or she was still inside a shop. The store would automatically be credited for the purchase.