BRITAIN’S BANKING POSITION

Dominion, Volume 32, Issue 103, 25 January 1939, Page 13

BRITAIN’S BANKING POSITION

Stability Not Affected By

Trade Shrinkage

“THOROUGHLY SOUND” SITUATION

(••Dominion” Special Service: By Airmail.) LONDON. January 2.

"The banking position is thoroughly sound, and the facilities afforded by the banks have proved adequate to the needs of the community.”

This statement, recently made by the chairman of one of the leading British banks serving markets overseas, accurately sums up the general position of British banking. Because of the world-wide ramifications of British finance, the banking institutions oi. this country are peculiarly liable to be affected by conditions prevailing in other countries, but recent bank reports .show that even where there has been some decrease in business the financial position of British banks has not been weakened in any way.

The case of a British bank operating in .South America is typical. Chough it naturally suffered from the shrinkage of trade, which affected South American countries in common with the rest, of the world, its gross profit of nearly £1,800.000 was only £41,000 less than in the previous year.

British banks less directly interested in financial operations outside the United Kingdom, but nevertheless subject to the influences of world trade conditions, give proof of the same stability.

One such bank, for instance, reports Hint in its operations during the 12 months to October 31 it has been able to make profits sufficient to pay its usual dividend, in spite of adverse trade conditions. This dividend was paid after its already large reserve fund of £3,150.000 had been further strengthened by £50,000, the bank’s usual annual allocation for this purpose.

The variation in this bank's profitlevel has been less than I per cent, during the past three years, and this capacity of adjustment to the fluctuations of trade is shared by all British banking institutions.