BANKING FIGURES

Evening Post, Volume CIV, Issue 7, 8 July 1922, Page 11

BANKING FIGURES

THE CORNER BEING TURNED

REDUCTION IN OVERDRAFTS.

A summary of the averages of the six banks trading in the Dominion for the quarter ended 30th June was published in these columns last evening. The figures show but slight increases in deposits, both fixed and free, and advances (or overdrafts), combined with bills discounted, show slight reductions when compared with the returns for the quarter ended 31st March last. But it is customary to compare one quarter with that of the year preceding, therefore, when comparison is made between the figures for the second quarter of 1922 with those for the quarter ended 30th June, 1921, it is seen that the banks have made great headway during the past twelve months in the reduction of overdrafts,, or advances ; although the money on current account is less, with a slight increase in the amount at public credit under the heading of fixed deposits. The combined free and fixed deposits for the second quarter' of 1922 were £41,388,881, as compared with £45,511,095, a falling-off since last year of £4,122,213. • It is in the free deposits or current accounts that the drop is to he noticed. These were £25,----046,470 for 30th June last, as compared with £29,2_4j633 for the June quarter of 1921, a reduction of £4,218,163; the fixed deposits have increased by £95,949. LAST YEAR'S PEAK., 'A i Combining advances with bills discounted, there is a total for the quarter just closed of £46,155,929. The average for the June quarter of 1921 under these two headings was £54,385,485—the highest point,they had ever reached before. The causes are too "well known to need - further remark than that June, 1921, vill probably be remembered as-the most lepressing period in the history of New .ealand commerce and finance. At that time, a year ago, the advances;'includ--1 ing discounts, were in excess, of deposits by £8,874,390, and this from an excess of deposits over advances of £19,808,511 for the June quarter of 1920. Last.year the pyramid stood on its apex; this June quarter it is to be. seen leaning well over in the direction of its original position. True the overdrafts (or advances and . discounts) are still £4,767,048 more than the deposits, both free and fixed; but the indebtedness of the public to the banks at the end of the second quarter of 1922 is less by over £8,000,000 than it was at last June quarter.' The hanks are obviously "nursing" many of their customers through an exceedingly difficult period; but great as is the need for continued care, the position of the country as disclosed in the banking figures is very 'much better ...than it was twelve months ' ago*. ".'- ' THE,TRADE BALANCE. Fortunately the balance ,of trade is ■in favour of the Dominion. For the five months ended 31st May, 1922, the value Of the principal exports of the country was £22,056,212, and of imports £13,803,492, a difference to credit of £9,252,720 on these figures. The production of butter and cheese has been phenomenal, and prices for some weeks past have been unexpectedly high for butter, and highly remunerative for cheese. The dairy season nominally closes on 30th April, but it has been prolonged. It begins again in August, and from that time onwards contributes its wealth to the country, with wool coming. in in November and meat a month later.. It is rash indeed to prophesy the markets; but those for wool and meat together, with assistance in the shape of lower freights, should be fairly satisfactory in the statistical showing. The interim figu^s show a shortage this year of over 1,000,000 sheep in the Dominion. This will represent a reduced shearing, but that may contribute to a slight increase in the price of wool. It is the bank returns for December next that should show the Dominion emerged from the slough in which overimporting and a fall of prices of main products had plunged it this time last year. The; returns for the March quarter of, next year, however, should provide even more satisfactory evidence of the recuperation of the Dominion from the severe setback it received last -year. With prudence, economy, and reasonably good markets for main products, the excess of overdrafts over deposits should entirely; disappear before the end of this year, or, at most, by the end of the first quarter of 1923.