BANKING RETURNS

Dominion, Volume 16, Issue 89, 11 January 1923, Page 4

BANKING RETURNS

FINAL QUARTER OF 1922

SATISFACTORY POSITION

A GENERAL REVIEW

Tho banking returns for the closing ouarter of 1922 show satisfactory movements when compared with the December quarter of 1921. There is a substantial decrease in the volume of tho advances, and although tho free deposits have contracted, tho Government deposits and fixed deposits have increased, the latter showing a substantial gain.

The 'salient features of the past quarter’s banking figures compared with those for the corresponding' quarter of 1921 are. given in the appended summary: —

Government deposits increased ... 927.383 Free deposits decreased 837,565 Fixed deposits increased 1.006.365 Advances decreased 3.998.249 Discounts decreased 129,461 Circulation decreased : 694,477 Metal reserve increased 2W.161 Taking the three classes of deposits, the aggregates compare as under:— ' Dec., 1921. Dec., 1922. Deposits. £ £ £ Government. 2,397,631 3.325,014 927.383 inc. Free 24,380,432 23,542,867 837,565 dec. Fixed 16,555,187 1,006,365 inc.

43,333,250 44,429,433 1,096,183 inc. The Government deposits, though substantially greater than in 1921, are very much smaller than in any of the five preceding years. In 1917 the deposits amounted to £9,905,324, due to war loans. The free deposits have contracted to the extent of £837,565 as compared with December, 1921, and they also show a shrinkage when, contrasted with the figures for the September quarter of 1922. The free deposits have a tendency to contract in the closing quarter of the year, and gain in volume in tho March and June quarters. The free deposits held by the several banks compare as un-

24,389,432 23,542.667 837,565 dec. The National Bank and the Commercial Bank show slight increases, but all the other institutions exhibit decreases. The fixed deposits are greater by £1.006,183, as compared with December, 1921, and this was secured by the Bank of New Zealand and the Union Bank, the figures of the several bb'iks showing as under:— Dec., 1921. Dec.. 1922.

16,555,187 17.561,552 1,006,183 inc. The increase probably represents the proceeds of loans recently floated by local bodies and placed at fixed deposit pending expenditure on public utilities. The free and fixed deposits for the December quarter of each of the past seven years show as under: —

Dealing now with the advances, the figures disclose, a shrinkage of £3,998,249 when contrasted with the figures for December, 1921, the result of the improved economic conditions. ,Traders and others have not now the same necessity for seeking bank accommodation. as was the case in 1920 and 1921, mid tho higher pyices ruling for primary products have enabled many farmers and others to repay debts due to the banks. The average advances of ouch bank for the December quarter 0f“i922 and 1921 compare as under:— Dec., 1921. Dec., 1922.

45,768,927 41,770,678 3.998,249 dec. Tho discounts also show a contraction, indicating that fewer promissory notes are being given now and that those holding such bills have no need to discount them to the same extent as previously. The discount, business done by the several banks is shown in the table appended:—

1,789,799 1,660.338 129,461 dec. The Rank of New Zealand alone shows an increase, and that a very small one. I The aggregates of the free and fixed deposits and the totals of the advances and discounts for each of the past nine, quarters show as under: — Deposits. Advances.

It will be noted that the deposits reached their lowest point in. the March quarter of last year, but in the succeeding quarters there was expansion with a set-back Inst quarter. The advances touched tho high point in the Juno quarter of 1921, but since then each quarter has shown a drop, except in tho past quarter. when there was a small increase. Tn December, 1920, the deposits exceeded tho advances, but since then tho advances have been in excess of the deposits. The note circulation shows a shrinkage of £694.477 as compared with December, 1921, testifying to the satisfactory progress of the deflation. While tire circulation has contracted, the coin and bullion have increased by £200,161, and the aggregates under these two heads for the December quarter of each of the past seven years show as under:— . Com and

Since 1920 the note circulation . has contracted to tho extent of 61,488,431, which shows how greatly the position has improved. Commodity prices aro lower and the people require loss cash in their pockets' to meet their daily needs. Although the number of notes in circulation is still very large, it will bo seen that the hanks hold sufficient in coin and bullion to redeem every note on issue and then have £1,120.202 to spare. This huge- reserve of metal earns nothing, but has to be maintained. Viewed as a whole, the returns are exceedingly satisfactory. The. country is well on the way to prosperity, which cannot be marred but can be delayed by polif’cnl complications in Europe. With our wool, butter, cheese, mutton and lamb selling at the present prices we'can look forward with confidence to enjoying prosperous times.

der: — Dec., 1921. Dec., 1922. Banks. £ £ £ New Zealand 11,635,893 11,102.315 533.578 dec. Union .. 2,797.055 2,764,25832,797 dec. N.S. Wales ... 2.684.589 2.537,885 146,704 dec. Australasia .. 2.479,869 2,291.970 187.899 dec. National ... ... 4,146,855 4,199,150 52.295 inc. Commercial .. 636,171 647.289 11.118 inc.

Banks. £ £ £ New Zealand 8.340,301 9,251,747 1,011.446 inc, Union 1,860,320 2,126,199 265.879 inc. N.H. Wales .. 2,418.738 2,378.115 40 623 dec, Australasia . 1.177,858 1,161,509 16,349 dec. National ... 2,958,015 2,410.175 547,840 dec. Commercial 259,955 233,807 26,148 dec.

Free Fixed Dec. deposit. deposit, i . -Totals. quarter. 1916 £ ... 18.031.742 £ 13,229,076 £f 31.260,818 1917 ... 18,496,716 13.777.901 32.274,517 1918 ... 20,536,868 14,466.976 35.003,844 1919 ... 30.136.062 14,433,913 45,569.975 1920 ... 32,939,759 16,517,134 49.456,893 192.1 ... 24.380,432 16.555 187 40.935,619 1922 ... 23,542.867 17,561.552 41.104.419

Banks. £ £ £ New Zealand 20.679.957 18.251.824 2,428,123 dec. Union 5.919.070 5,509.660 409.410 dec. N.S. Wales .. 5.014.385 4,588.470 425.915 dec. Australasia 5.797.165 5,506.484 . 290.682 dec. National) ... 7.640.438, 7,148.485 491.953 dec. Commercial 717,911 765.755 47.844 inc.

Banka. £ .£ £ New Zealand... 978.492 1,029.275 47.783 inc. T r nion 116,093 89.244 26,849 dec. N.S. Wales ... 210.269. 170,5041 39.762 dee. Australasia ... 171.643 140.344 31,299 dec. National 26M5tf 195.396 71.056 dec. Commercial ... 46.857 35,579 11.278 dec.

Quarter. £ £ Dec.. 19’0 49.456.893 47.118.295 Mar., t921 .... 47.155.730 52.446.341 45.511.095 54.385.485 Kept., 1921 .... 43.445.663 48.039.609 Dec.. 1921 40.935.621 47.558.726 Mir.. 1922 .... 40.360.389 46.491.314 .Time. 19” 413°8.8% 46.155.934 Sept.', 1022 41.961.8'6 42 994 4/R D-'c.. 1922 . ... 41.104/19 43.431.016

Dec. Quarter. 1936 Circulation. £ 4.778.267 bullion. £ 7.688.098 1917 6.464.695 9.993.391 1918 6.761.705 9.434.670 1919 7.254.412 7.862.415 109-9 8.252.339 7,657.093 1921 7.458,385 7.683.949 1922 6.763.908 7.884.110