The Dominion. THURSDAY, APRIL 16, 1908. BANK RETURNS.

Dominion, Volume 1, Issue 174, 16 April 1908, Page 6

The Dominion. THURSDAY, APRIL 16, 1908. BANK RETURNS.

The .banking returns for' the first quarter of the year present some striking features,- which indicate that New Zealand, in common with the rest of the world, has entered upon a period of shrinking trade. There is a_ decrease in the note circulation, a microscopic increase in the deposits, and an abnormal increase in the amount of the advances 1 and discounts. The' conditions are such as to give bankers both pleasure and .anxiety—pleasure in the knowledge of being able to make big profits, and anxiety in the knowledge that the greatest care and discrimination aro necessary in making advances. ]sealing first with the assets and liabilities, the excess of assets amounts to the appreciable sum of £4,160,310, while at the corresponding date of last_ year, such excess was only £235,317, and in 1.90G the liabilities exceeded the assets by the substantial sum of £597,448. The following table discloses the movements: — Mar., 190 G. Mar., 1007. Mar., 1908. JC ' ' «£ " .£ Assets ... 22,830,581 25,501,896 28,825,509 Liabilities 23,428,029 25,200,579 21,005,259 : .£597,4-18" ,£235,317 .£4,160,310 •Excess of liabilities. The substantial excess of assets exhibited in the quarter, under review is due almost entirely to the fact that the Bank of New Zealand has brought tack money ■ fiom London, or ratlier

did not remit to London as usual, and lias allowed the balances tliere to decrease. This appears to have been accomplished through the Government deposits. For the March quarter of 1907 the Government deposits held by the 'Bank of New Zealand totalled £2,415)216, while for the quarter just closed the deposits amount to £1,748,902, and eliow /a decrease of £(i(JG,3I4. If we compare the' assets and liabilities of the Bank of New Zealand . for the March quarter ■of three years, the movements will be apparent. Liabilities. Assets. Govt.'s Mar. Deposits. 3i. .£ ' £ 1900 12,071,032 9,007,824 2,257,391! 1907 ... ... 13,054,860 10,78-1,35!) 2,415,210 1908 • ... ... 12,610,220 12,412,557 ' 1,745,903 Turning now to the deposits, and dealing first with 1 the fixed deposits, there is a shrinkage as' compared with the corresponding quarter of last year of £140,817, and that notwithstanding the fact that the rates on deposits were increased with the object of attracting deposits. The movements of the fixed deposits, as they affect.each bank, are shown in the table appended. Increase 4 Mar., 1907. Mar., 1908. Decrease-! Bank. .£ ' N.Z 4,521,673 4,573,010 51,337* Union ... ... 1,466,561; 1,313,818 152,74Cf N.S." Wales' 1,658,232' 1,624,006 * 34,226f Australasia 576,123 . 583,774 7,651* National ... 1,477,919 1,459,086 18,8331 . JC9,700,511 £9,553,094 .C148,817t The free deposits, or current account balances, show the moderate' increase of £191,297, and all "the banks shared in this except the Union" Bank. The table appended shows the changes, * ■ Increase." Mar., 1907. Mar., 1908. . Decrease.! ■ Bank. £ . £ ■£ N.Z. ' ■ 5,173,083 ' 5,321,918 . " .148,830* Union ... 1,745,502 • '•••• 1,579,497 106,0051 N.S. Wales 1,4-69,618 . ; 1,563,898 : .. 94,280* Australasia' 1,214,77-1 1,291,111 76,337* National,... 1,740,600 1,778,455 37,855* XII ,313,582 ,£11,534,879 ' £191,297*. The "Union Bank, it will be noted, exhibits a decrease dt £152,740 in fixed deposits, and £106,005 in free deposits. At the. corresponding date last year the aggregate of the fixed deposits increased by £90,649, and the free deposits by, the ■ substantial' sum of £1,631,563. A great change has come over the situation, and : business ,men will do' well to : endeavour to account for the change. • Briefly, stated,- the. fixed and free deposits combined inci eased last year by £1,722,2-12, while this year.the increase is only,£Mi'4Bo. It is, a significant change. ' , Passing now to the advances, there is the enormous increase of £2,990,763; and; the share of each A bank in this expansion is shown below:— "■ ■Mar., 1997.. Mdr., 1908.', Increase. - Bank. ,£ .5 £ •N.Z.' ... ... 5,314,333 ; 1 7,104,933 1,790,600 Union ...>2,615,796 ■ ' 3,297,020 . 081,230 N.S. Wales 2,684,593 , 2,803,456 118,513 Australasia ' 2,501,5-12 ' 2,770,722 : 2G9.1E0 National ...2,435,283, .2,506,193 130,910 _ ' ■ The increase last year was only' £1,559,723: these figures, are also full of import and significance. The discounts show a moderate increase, being £92,987 more than last year. The growth of the fixed .and,free deposits .combined, and. the - advances and, discounts combined for )each,of ; the past; seven years,, make an. interesting' study in figures. '

Mar. Deposit. Increase. Advances. Increase. 31. £ £ . £ £ • 1901 15,125,721 12,115,710" — ' 1902 15,405, GOO 279,879 12,690,189 '571,470 1903 16,996,528' 1,590,928 12,963,744 ' 273,555 1901 .17,650,572 -, -600,044 14,421,088 1)457,341 1905 ' . 18,247,555 , 590,933 15,074,245 •' V 653,157 1903 19,008,179 760,624 -16,135,305' 1,061,060 1907 21,044,093 2,035,911 17,554,355 1,419,050 1908 - 21,038,573 ; ■ 44,480 ' 20,635,105; 3,053,750, The increase in the advances and discounts this year is more than twice as great'as that'shown in' any year-under comparison, while the increase in the deposits is a mere fraction of that 6hown in previous'years. ' : The note circulation is the barometer of domestic trade', and'for the first time in many years 'the circulation shows an adverse movement, as the table below discloses.' Mar. 31 £ , 1901 ... : ... ... . ... 1,349,225' 1902 ... ... 1,353,106 1903.' ... ... . ... 'v.:; 1,413,243 '■ 1904 ... •...-• .... 1,471,103 1905: • ' - ;.. ;.. ... ... 1.457,970 - ', 1906 ... ... 1,517,609 ,' 1907' ... 1,647,731 . - ' .1903' : '■ ... ... - ... 1,640,783 ' : The. shrinkage lis very small, . but it is no consolation because at is . small, for it indicates that' there is a retrocession in domestic, trade. , If the circulation is less, the coin and bullion in tlie aggregate are, much larger than a year,, ago, . the i amount being£4,978,658, ;as agaiust' £4.602,657. The note circulation and metal reserve of each bank for .the past quarter is shown in-the table appended '' '' ' 'Coin and Circulation, bullion., ' Bank. £ £ N.Z.,"... ... '... ... 888,031 2,185,293- , ■ Union , ... ... 155,154 ' 595,851 ■ N.S. Wales ... ... 182,677 ' 757.765 ' ■ Australasia ... .1. 146,277 546,269 • National ... ... ... 268,G44 ' 893,-ISO .£1,640,783 J!4,978,653 /. The returns' can scarcely be regarded with satisfaction, the adverse movements are pronounced to, be pleasing. There is -undoubtedly not the slightest' occasion for alarm, but it would be folly of the worst kind not to read into the figures the necessity for care and caution. : \