THE TRADING BANKS

Dominion, Volume 30, Issue 153, 25 March 1937, Page 14

THE TRADING BANKS

Record Level of Free Deposits OVERSEAS FUNDS HIGHER Further Decline in Advances A higher level of demaud liabilities, a fail iu time liabilities, a further decrease in advances and discounts, a rise in overseas funds and a high total note circulation are the principal features ot the monthly statement of the assets and liabilities of the six trading banks m New Zealand as at Monday, February 22. The ratio of total deposits to advances has eased to 65.995 per cent. Furnished in accordance with the provisions of the Reserve Bank Act, 1933, the statement, which was gazetted last night, shows the following aggregate figures in respect of the six banks: — LIABILITIES.

(a) Demand liabilities in New Zealand *36,<3<,t>Jo (b) Time liabilities in New Zealand ..... 32,599,8u8 (c) Demand liabilities elsewhere than in New Zealand incurred in respect t of New Zealand business 804,8 < < (d) Time liabilities elsewhere than in New Zealand incurred in respect of New Zealand business ot)0,88b (j) Notes of own issue in circulation payable in New Zealand (m) New Zealand business — Excess of assets over liabilities 10,193,034 Total £55,896,24S •Including transfers from Bank of New Zealand’s long-term mortgage fund of £348,841. ASSETS. (e) Reserve balances held in £ the Reserve Bank of New Zealand 11,3iu,1-8 (f) Overseas assets in respect of New Zealand business — (1) In London 8,805,00 b (2) Elsewhere than „ in London 5,u56,<u4 (g) (1) Gold and gold bullion held in New Zealand 1,040 (2) Subsidiary coin held in New Zealand . . 72u,490 (h) Aggregate advances in New Zealand 4t>,192,9<6 (h) Aggregate discounts in New Zealand 566,312 (i) Reserve Bank of New Zealand notes I,_J—lo4 (k) Securities held iu New Zealand—(l) Government ... <,618,144 (2) Other than Goveminent Lbi,:>6B (l) Value of land, buildings, furniture, fittings and equipment held in New Zealand ’ 1 ,0b2,629 Total £85,890,248 (lili) Aggregate unexercised . overdraft authorities . . £2u,26i>,4-3 Movements in Deposits. A further substantial rise is seen in the trading banks’ demand liabilities, or current account balances in New Zealand, which on February 22 stood at the record level of £30,737,593, compared with £30.020.901 on January 25. an increase of £1,716,092. The increase is the normal trend for this time of the year, and is due mainly to returns from sales, of primary produce overseas. The large increase shown this year may lie accounted for by the marked rise in wool prices and partly by the operation of the guaranteed prices scheme for dairy produce. The total of demand liabilities on February 22 is £0,268,272 in excess of that of a year ago. Time liabilities, or fixed deposits, m New Zealand on February 22 totalled £32,599,858. a decrease of £349,222 since January 25, and a total decrease of £4,710,968 since April 27. 1930. The time liabilities are now at the. lowest level for several year,?, and are £7,992,516 below the total of £40,592,374 shown on July 30, 1934. A comparison of the trading banks’ demand and time liabilities and the totals of the two is as follows:— Demand. Time. Total.

Demand liabilities elsewhere than in New Zealand iu respect of New Zealand business on February 22 to £864,877, compared with £1.160.325 on January 25, a decrease of £295,445. Time liabilities elsewhere than in New. Zealand in respect of New Zealand business on February 22 totalled £500,856, compared with £751.262 on January 25, a decrease of £250.376. The item, New Zealand business, excess of assets over liabilities on February 22 was £15.193,034, compared with £16,850,578 on January 25. a decrease of £1,687,544.

Reserve bank balances held by the trading banks on February 22 totalled £ll,375.128, compared with £11,870,436, a decrease of £495.308. Government securities held by the trading banks on February 22 amounted to £7,618.144. compared with £4.785.764 a year ago, an increase of £2,832.380. Advances and Discounts Lower. The aggregate advances in New Zealand of the trading banks on February 22 amounted to £45,192,976, compared with £46,804,996 on January 25. a decrease of £1.612,020. Aggregate discounts in New Zealand at £566,312. show a decrease since January 25 of £45,341. The total of advances and discounts on February 22 was £45.759,288, compared witli £47.416.649 on January 25, a decrease of £1,657,361. The excess of demand and time liabilities over aggregate advances and discounts in New Zealand on February 22 was £23.578.163, compared with £20,553.332 on January 25. an increase of £3.024,831. The relative position of advances and deposits at different periods is shown in the following table: — Advances Excess of

1937. Jan. 25 67,969.981 47.416,649 20,553,332 Feb. 22 69,337,451 45,759,288 23,578,163 The ratio of aggregate advances and discounts to total deposits on February 22 was 65.995 per cent., compared with 69.761 per cent, on January 25, 75.198 per cent, on December 28, ami 77.528 per eent.jm November 30. The low point was 55.95 per cent, in August, 1934. The . aggregate unexercised overdraft auHioritie.s l on February 22 amounted to £25,265,423, compared with £23,395,173 on January 25, £22,461,572 on December 28, ami £20,932,458 on November 30. A Rise In Overseas Funds. The trading banks’ London funds ou February 22 amounted to £8.308,008, an increase of £946.123 since January 25. Overseas funds held elsewhere than in London in respect of New Zealand business on February 22 amounted to £5,586,754, compared with £5,221,770 on January 25, an increase of £364,984. The total overseas funds of the trading banks, London and elsewhere, on

February 22 was £13.894.7(52. an increase of £1.311.107 since January 25, due principally to realisations of wool and other produce.

The totals of the trading banks’ overseas assets in respect of New Zealand business as shown in the monthly returns compare as follows: — London. Elsewhere. Total.

Note Circulation Higher. The total of the note circulation Jn the Dominion as at February 22 was £8,460.755. an increase of £105,602, compared with the figure on January 25 and only £1.982.468 below the record figure of Christmas week. The latest figure is £1,543.341 in excess of the total of £6,917.414 of a year ago, and with the exception of the December total, is the highest monthly total yet recorded. The position of the note circulation as at February 22, compared with that at the dates of previous returns, was as shown in the following table:—

1935. £ £ £ Mar. 25 27,073,865 35,454,763 63,128,568 June 24 25,921,898 35,826,533 61,748,431 Sent. 30 24,635,039 36,750,637 61,385,676 Dec. 30 27.167.633 37.135,850 64.303.4S3 1936. Jan. 27 28,827,915 37,033,607 65,861,522 Mar. 30 31,946,454 36,529,960 68,476,414 June 29 30,805,731 36,066,713 66,872,444 Sept. 28 2S.934.657 34.4S5.S42 63.420.499 Dec. 28 31, OSO, 367 33,123,748 64,204,115 1937. Jan. 25 35.020.901 32,949,080 67.969.9S1 Feb. 22 36,737,593 32,599,858 69,337,451

1935. Deposits & di.sets. £ deposits. £ Mar. 63.128,568 44,573,365 18,555,203 June 21 61,748,431 45,172,184 16,576,247 Sept. 30 61,383,676 47,711,493 13,674,183 Dec. 30 64.303.483 46.566.37S 17.737,105 1936. Jan 27 65,861,522 45,649,334 20,212,188 Al a r. 30 68.476,414 44.918,852 23,557,562 June 29 66.872,444 45,077,019 21,795,425 Sep. ‘2X 63.420.499 45.999.S13 17.420.6S6 Dec. 28 64.204,115 4S.2S1.9S2 15.922,133

1935. £ £ £ Mar. 25 16.605,200 7,312,980 23,918,180 June 24 18,682,794 5,813,844 24,496,638 Sept. 30 16,206,526 5,672,475 21,819.001 Dec. 30 9.754.717 6,028.133 15,782,850 1936 : Jan. 27 11,149,879 6,183.192 17.333,071 Afar. 30 14,143,369 6.226.321 20,369,690June 29 17.316,659 5.900.334 23.216,993 Sept. 2S 12.890.571 5.7.85.499 18,676,070 Dee. 28 7.907.916 5.373,730 1.3.281,646 1937. Jan. 25 7,361.SS5 5.221,770 12,583,655 Feb’. 22 S,308,008 5,586,754 13,804,762

T. Banks. R. Bank, Total. 1935. £ £ £ March 25 854,(MO 5,382.889 6.237,529 June 2-1 710,068 5,396,892 6,106,960 Sept. 30 632.58-1 5,860,257 6,492,841 Dee. 30 584,668 7,029,286 7.613,954 1936. Jan. 27 571,768 6,275,992 6,847,760 March 30 545,254 6.559,787 7,105,041 June 29 517,745 6.704.193 7.221.938 Sept. 28 — 7.771.941 7.771.941 Dee. 28 -— 10,443,223 10,443,223 1937. Jan. 25 — 8,355,153 8,355.153 Feb. 22 — 8,460,755 8,460,755