AUSTRALIAN BANKING

Evening Post, Volume CXVIII, Issue 20, 24 July 1934, Page 12

AUSTRALIAN BANKING

DEPOSITS INCREASE

CREDIT BROUGHT IN BY WOOL

Features of the aggregates of the abstracts of' average liabilities and assets of the ten trading banks in Australia: during the June quarter are the great increases in deposits and the great increase in the holdings of notes and of cash with the Commonwealth ; Bank, compared with the aggregates of the corresponding quarter a year previously, states the. "Sydney Morning Herald." Fixed deposits increased by £9,929,326, and current accounts by £12,353,939: -The amount--of the increase is due to the great accession of credit brought about, by the higher wool prices of the season now closed, which had its effect all through the community, and the fact that there was little inclination to launch out into fresh enterprise. ' . ■ ' -, MONEY IN IDLENESS. Rather than put it into new investments, money is kept in the banks, and" as much as possible placed in" Commonwealth loans,: with their concessions in regard to taxation. That the current accounts increased so much more than the fixed deposits is probably dve1 to some banks rationing fixed, deposits, and to some extent to depositors keeping more free cash. . Total deposits increased by £22,?83.365. ..-. .. , : , . ..'Agai'ist this.increase the, item "all other assets," ■ which'is largely composed '. of advances and •.discounts, increased *'. by ■£2,544;0.66.' The' contrast Js\: again further evidence of tlie hfesitahcy on the part of customers of: the banks to use the banks' resources to enter into new enterprise^ and into extensions of existing enterprises. In the. . other. principal means, of investment;of. the funds, of the banks—Government securities '■■, and Commonwealth Treasury bills -the movements are in contrary directions, and that they are; not greatly different is due to thenmovements haying the same origin. .'/■ FEWER TREASURY BILLS. ■ Government : -securities '• increased by £3,251,796, and, the. holding of Commonwealth. Treasury bills'••diminished by £3921,448. ...While; ,the\ return.on ' the latter is not so good as on Government securities, they are preferred because, of their greater liquidity. Their -reduction has been about by the Commonwealth Government using part of the proceeds of, loans to redeem bills, and the banks- have-invested in Government securities the proceeds of the liquidation. • Ine .holding of Australian notes of the trading banks, and their cash with the Commonwealth Bank .increased by £ 11.98,7.855 during the year. ■ -Assets iii Australia mentioned above; increased by '£14,170.000, the difference- between the sum. and. total deposits,;roughly -£8,000.000. is held abroad, the greater- part, it maybe presumed, in London. ■■'■'' " .■',': The banking aggregates for .the June quarters of last year and for this compare as follows:— ' ■ ■ ■ ' • =■ LIABILITIES.

. ;lUTIO, TER; CEXt; Cnsh to .deposits ~ , 13.03 iV n-, Advances and dis- • countst to deposits 85.23 79 78 'And cash with Commonwealth Bank. | Exoll.er ny S eS-' '" C<? mm°™ >V?ank. t "AH

June, 1933. June; 1034. ST.! 08 180.138 H3.590 £ lns 2 142.181 2.375,973 Due to banks 1,197,901 1,282 307 .Deposits— Besrlnjr interest. ]8">,672.054 105 602'80 Xon-lnterest . .. 8.9.015 907 lOl.SGO.fUO All other liabilities 2.916,117 2,754 912 T<"»1 231,126.088 303,558.898 ASSETS. £ n'n, 1,637,182 1,634 600 Bullion 233.102 243.6" Australian notes • 39,-148.632 51,431587 GOTt.' securities ... 19,297,885 2>.3I9.6!>I Cnmmonnealtli Treasurj bills ... .33,483,751 29.362 30(, Landed prop 8,017,441 8 108'l50 Si? V\ b'l, nKs T 3,03n,»ne 3,401.271 Bis of banks ... .1,413,050 1,585 556 All other assets .. 234,119,131 236.963.20u Total assets 341,289 056 355,603 022