RESTORING THE BALANCE

Dominion, Volume 19, Issue 77, 24 December 1925, Page 5

RESTORING THE BALANCE

GOLD IMPORTED INTO

AUSTRALIA

SOUND POSITION OF BANK OF NEW SOUTH WALES

‘Tor the first time in the history of the bank—covering a period of 108 vears—we present to the shareholders an annual instead of a half-yearly report and balance-sheet of the affaiiiof this bank,” remarked the president of the Bank of New South Wales (Mr. Thomas ’ Buckland) in moving the adoption of the report at the ordinaty general meeting of shareholders held at the Head Office, Sydney, on Friday, November ‘27. “The change has been beneficial in many ways,” proceeded the president, ‘‘and we think that the shareholders will agree that it is not wise to disturb the business and routine of a large institution like ours twice a year for the small satisfaction of making comparisons between the figures every six months._ “Our note circulation in New z.ca land shows a slight increase of £54,000, but the total is considerably lowei than the average for the past six years. Deposits at £57,070,095 are a record. They have increased £4,074,000 during the year. A great part of this increase is due to the high prices obtained for our primary products during the early part of the year. Bills payable have increased £183,000, which is a nominal fluctuation of no significance. Reserve fund and profit must be taken together on this occasion, otherwise the increases in the respective items might be ‘ misunderstood The total increase in these two items is £379,000, but had we balanced in March, as formerly, the reserve fund would have been £150,000 more and profit that much less. The actual increase in profit for the year is £13'2,548, as will be mentioned later on. ‘‘On the asset side, coin, notes, and cash at bankers show an increase of £1,460,000. Yon will remember that when I last addressed you the banks were experiencing great difficulty and expense in transferring funds from London owing to the currency both here and in London being on an inconvertible note basis. Earlv in December sterling improved until the dollar rate reached such a point as to make it practicable to import gold from San Francisco. We’ -at once arranged for a shipment lof £.1,000,000,’ and the first instalment of £-250.000 was landed here on February 10, 19-25, which we understand was the first shipment of btdlion every imported into Australia from America. Later on we obtained further large shipments from South Africa. The exchange rate continued to improve, until on April -28 Cheat Britain, Australia, New Zealand, and South Africa reverted to the prewar gold standard, and to-day we have no anxiety in respect to our large holdings in London should tbev be required here. 'The total gold imported into Australia during ' th vear. was £10,500,000 (pur share being £-2,250.000), being part of the surplus funds which had accumulated in London.

( “Our ratio of cash to deposits is now ‘27 per cent, and of liquid assets to deposits 59 per cent. Short call, Treasury bills, investments in London and bills receivable in London show an increase of £1,750,000, but, as we have just said, w<: arc now able to transfer funds Jo Australia to finance the usual season’s business, and arc therefore relieved of the load of uncertainty and restrictions which obtained during the last few years. The prospects of the present season are hardly as favourable for so large a yield, and prices for primary products are also not as good as before. The financing therefore of exports will not entail such a heavy drain on our resources as was the case last year.

“Bills discounted and advances have decreased £4-26,000. The bounteous season previously referred to enabled many customers to' reduce or pay off advances made to them, and new business has not quite made up for these payments. Advances to the Sugar and Wheat Pools—£lo6,oo(l. —have been paid off. Our advances bear a ratio of 74.7 per cent, to our total deposits, which may be considered quite satisfactory. “The profit for the year ended September 30, 1925, is £132,548 more than last vear. This is partly accounted for by. the large increase in volume and prices of exports already referred to, of which our share of the financing was considerable, and partly by the improved rate of interest earned on money in London, and it enables your directors to recommend a distribution of a bonus to the shareholders of 10s. per. share. A bonus of 5 per cent, on their salaries has been paid to the staff. Both these bonuses are exceptional and are not to be rcgaTdcd as in any way a precedent.”