BANK SUSPENDS.

Dominion, Volume 4, Issue 1244, 28 September 1911, Page 5

BANK SUSPENDS.

BIG CONCERN IN TROUBLE. SPECULATIVE MANAGER IN EGYPT. EFFECT OF TRIPOLI CRISIS. London, Soptember 27. (Rec. September 27, 9.45 p.m.) The Bank of Egypt, Limited, which was incorporated by Royal Charter in 185G, and has a capital of .81,000,000, has stopped payment. The suspension of the bank came- as a surprise, as it had hitherto been one of the most successful in Egypt. The dividend in 1910 was at tho rato of 11 per cent., but in the last statement it was announced that ,£300,000 (PX200.000) had been transferred from tho reserve to writ© down investments and meet contingencies in connection with certain speculative operations. Tho newspapers state that Luzzatto Pasha, tho late general manager of the bank, was a remarkablo personality. Ho had long controlled tho bank, and was a reckless speculator. He died recently. Luzzatto borrowed largely for private speculation, and tho board in London was completely in his hands. Lord Jlilner recently resigned from tho directorate owing to tho bank's unsatisfactory position. Tho Mohammedan habit of hoarding gold had increased the bank's difficulties, but the immediate cause of tho suspension was tho Tripoli crisis, which had caused a run. It is understood that tho assets show a durplus in hand. Tho Loudon market holds a million and a half of the Bank of Egypt's acceptances, and tho liquidator will arrange for the speedy reimbursement of the holders. Substantial peoplo arc already preparing a guarantee to that end.

Tho subscribed capital of tho Bank of Egypt, an English concern with its headquarters in Loudon, is .£1,000,(160, of which amount ,£500,000 is paid up. At the annual meeting of tho bank on March 8 last it was announced that a sum of .£200,000 had been transferred from tho reservo account, which had proviouslv stood at £1-10.000. Mr. R, L. Barclay", chairman of directors, stated that during tho year it had been found upon tho death of the bank's loto manager in Egypt, Luzzatto Pasha, that he had bcon taking business of a most risky character, and that many bad debts had had to bo written off.

' Lord Rathmore said:—"l liavo been for twenty-seven years now a director of this company, having joined the board shortly before Luzzatto Pasha was mado manager and during all that long period, until almost the last two years of it, I, and thoso who were my colleagues during that time, had seaa the Bank of Egypt make ono of tho most rcmarkablo successes that I supposo was ever achieved by any similar institution. We had seen tho profits and the dividends rise steadily during all that period—rapidly and regularly, almost without intermission. I will give von ono figure. When Luzzatto Pasha became tho general manager wo were paying a dividend at tho rate of 9 per cent., and we thought it very good at that time, lint rapidly and steadily that dividend rose, and when Luzzatto Pasha died wo were paying 18 per cent. It may have been—l do not know—that his great success financially and socially, may, as has often been the case with other men, have turned his head; it may have been that he was swept along in tho great wave of reckless gambling which was then running riot in Cairo and Alexandra. But, whatever may havo bee.n the cause, the fact is, as Mr. Barclay has (old you, that during thoso last two or three years he did many things and adopted methods of managing the bank wholly different from what he had pursued before."