NATIONAL BANK OF NEW ZEALAND

Dominion, Volume 22, Issue 288, 31 August 1929, Page 15

NATIONAL BANK OF NEW ZEALAND

FEATURES OF BALANCESHEET REVIEW BY HON W. PEMBER REEVES The fifty-seventh ordinary general meeting of the National Bunk of New. Zealand was held in London last month, the lion. W. I'ember Beeves presiding. In moving the adoption ot the report and balance-sheet, Mr. Beeves said: "Our pqid-up capital remains unchanged at £2,000,000, and our reserve fund stands at the same figure. Our reserve fund is entirely invested in British Treasury Bonds and Dominion Government securities. Note circulation shows a slight increase of £124,000. The average circulation of all the banks in New Zealand during the year was £6,373,000, and they had the right of issue up to £12,100,000. Deposit and current accounts are reduced from £12,088,000 to £10,567,000, a difference ot about £1,500,000. As a matter of policy, we decided to pay off a large proportion of our longdated deposits in London rather than continue them at high rates of interest. On the other hand, bills payable and other liabilities are increased by £1,234,000. The Assets. -“On the assets side of the balancesheet, coin and bullion and money at call are down by £OOO,OOO, due partly to the reduction of liabilities unuer deposits, and partly to the earlier return of funds to New Zealand. Coin, at £851,000, shows a decrease- ojj last year’s figures of £lOO,OOO. This is accounted for by the increase Of the same amount, in our investments, which now stand at £2,230,000. We thought this a profitable exchange, as our coin reserves in the Dominion were high enough for all practical purposes. Bills receivable and discounted show a ngt decrease of £740,000, whilst advances on securities and current accounts are increased by £1,150,000, and now stand at £10,352,000, as compared with £9,212,000 a year ago. We are satisfied that these are well-spread. The average percentage, of our advances to deposits over the last five years has been just over 89 per cent. Landed property and premises stand at £006,000 at March 31 this year, as compared with £572,000 in 1028. Allocution of Profit. “The net profit, after paying a bonus to the staff of £ll,BOO, is £290,000, which shows a small increase of some £BOO. The sum of £lO,OOO has been placed tp premises, and £ll.OOO allocated to pension and gratuity funds. The same dividend and bonus as. last year hus been pa d, and the amount carried forward, ilou,ooo, is considerably more than six months <Jiv* idend and bonus. Expenses of management' und changes at head-office and 94 branches and agencies, are practically the.same as last year. ♦ “By the end of the current year, the Bank will have overtaken the arrears iu its general building programme, It has taken' us ten years to do this, and the expenditure has been heavy, but it has been necessary,” Figures of the Six Dominion Banks. “The figures of the six banks in the Dominion for the March quarter, 1029, show the position of deposits and advances as under: — . £ Deposits (exclusive of Government) .... 50,346,000 Advances 46,300,000 Excess ot deposits .... 8,986,000 As compared with, the previous year:— Deposits increased by. 5,388,000 Advances increased'by . 290,000 Making an increase in Bank- - ing resources of - 5,098,000 Of the* increase of £5,388,000 in deposits the g rca ter portion—over £4,000,000—is. under the heading of fixed deposits. This is largely due to the 5 per cent, rate granted for 24 months' deposits, a rate which was, however, reduced by i per cent, on July 9, 1928. This reduction has apparently steadied the tendency to invest surplus funds in such deposits. (. “The Post Office Savings Bank figures again show an excess of withdrawals over deposits of £850,559 for the twelve months, but the total of such deposits, •after allowing for interest, as at March 31, 1929, is estimated at £48,419,000. as against £47,758,726 on March 31, 1928. “For the financial year to March 31, 1929, the overseas trade of the Dominion was: —• '■ ' £ Exports 57,154,000 Imports 4. 45,106,000 Excess of exports .. 12,048,000 The figure for exports is the highest ever recorded. As before,' the bulk of exports comes, under the headings of dairy produce, wool, frozen /neat, hides, skins, and tallow.' Turning to imports, I will only point out that North America, as before, dominates the motor market. Farming Year. “The dairy year has been satisfactory. There" is no doubt that the increase in output of dairy produce has been largely due to the greater use of fertiliser, chiefly superphosphates and lime. The imports of these, have trebled in the last six years, and, fortunately for- the farmers, the price has fallen, considerably. “Turning to wool, the total value of our export which'l just gave you shows a decrease of about £1.100,000, due chiefly to a decrease in the amount shipped. The number of sheep in the Dominion is still mounting; indeed, this year the increase 1

is very large, amounting to nearly 2,000,000. The total number now slightly exceeds 29,000,000, and is easily a record for the Dominion. The increase has been faster this year in the North Island than in the South, and the flocks in the former arc now rather more than 2,000,000 larger than those iu the latter. It is quite evident that woolgrowers, encouraged by the good prices for wool, are keeping their breeding ewes, so that another increase may be hoped for in the current year, ... “Further evidence of this is shown by the figures of the frozen meat export. Of these, the figures under head of lamb show an increase of £217,000 only, while mutton shows a small decrease. The figures for lamb are £6,712,000 this year, as compared with £6,495,000 in 1928, and £1,009,000 this year, ns compared with £2,071,000 in 1928 for mutton. On the other hand, beef, which last year showed a large relative increase, has again risen. This year the export stands at £883,000, against £478,000 for two years ago. “The estimated returns for wheat and barley this year arc lower than last year, as wheat is expected to average 33 bushels an acre, against 36 i yielded last year, and barley to show a rather larger decrease. The total acreage of all crops in New Zealand is only about 1.i00.00U acres, which looks small alongside the large pastures of the islands. “Of the smaller branches of production, fruitgrowing continues to make progress; the export of apples last year was valued at nearly £500,000. New Zealand hemp is still depressed by low prices. The growth of tobilcco continues to Make quiet headway. The growers and millers of native flax are meeting their troubles by Improving the quality of the plant and bv the experimental use of it in the timber trade. Little or nothing is known in England of the secondary industries of New Zealand. Nevertheless, they are by no means negligible. Ihejr annual output is now valued at £83,000,000, and on the whole their condition is satisfactory. New Zealand Loans. “During the financial year ending with March last the Government has floated two loans, one of £5,000,000 in Slay, 1928, and one of £7,000,000 in January of this year. ' Both were completely successful, the second loan especially so, as the rate on it was several shillings cheaper than on the first loan.” Banks and the Public. Mr. Beeves made a brief reference to the projected new banks, and stated that the six banks now working in New Zealand have 560 branches and agencies open to customers for business. There was, therefore, one banking” office to about every 2600 of the population. The banks have lent the public £47,000,000 —a tidy sum for a population of .1,500,000. If more were, fairly required, they wouldlend it. “I would, however, point out, said Mr. Reeves,"“that so far from being niggardly towards the public, the bunks lend a much higher proportion of their deposits than English bankers would dream of doing, Nevertheless, if .1 may judge from what I read and hear, they are criticised for not lending enough. The truth is that there is a confusion between banking and mortgage loans. To suggest that because banks do not lend up to the last penny of their deposits they are keeping millions of money idle which might go to develop the country is not only wrong but really dangerous talk. It has been our settled poUcy to help primary producers-in New Zealand in every legitimate way.” Tribute td late General Manager.

After referring to the death of Mr, Robert Logan, for many years a director of the bank and a former chairman, Mr. Reeves paid a high tribute to the late Mr. G. W. Mclntosh, the general manager, whose unexpected death in November occurred within. a few weeks of the date fixed for bis retirement. Some months before Mr. Mclntosh s death occurred his successor had been selected. Mr. J. T- Grose, an Australian banker of much experience, had for some time held the post of senior inspector for New Zealand in the service of the Bank of New South Wales. He is, therefore, well acquainted with business in the Dominion as well as in Australia, and his ability and character are thoroughly understood in business and commercial circles. The directors were confident that in Mr. Grose they, had secured a general manager fully equal to the responsibilities of. his position. In order to confer with him on matters of policy, Mr. Grose had been asked to come to London, and is expected there early in October. He will remain long enough in England to enable the directors to review the New Zealand position and to decide on the lines to be followed by the bank during the near future in the Dominion. Interesting features in connection with the bank's balance-sheet are: Shareholders’ funds, including balance carried forward, equal 22 per cent, of the bank’s total assets; the amount of liabilities to the public for every £l,of shareholders’ funds is £3 9s. 9d.; the 14 per cent, dividend paid equals £6 14s. 9d. per cent, on shareholders’ funds employed during the year, and approximately £5 Os. lOd. per cent, on the market price of the shares; the liquid assets are equivalent to 45 per cent. ,or 9s, in the £1 of the totql liabilities to the public.