BANKING RETURNS

Evening Star, Issue 20612, 11 October 1930, Page 13

BANKING RETURNS

SUPPLY OF FUNDS GOOD DESPITE BAD EXPORT SEASON [Special to tee ‘Star.’] WELLINGTON, October 10. The returns for the September quarter of the six banks, trading here reveal a moderate measure of improvement on the figures of three months ago, due chiefly to the reduction in importation. It is unusual to see this movement al this time of the year, as it is the tail end of the export season, and demands on the banks for the coming season are _starting. However, the restriction of imports has started, and has made some effect on the figures now tinder review. The following is a comparison of the principal items with the figures of three months ago. ,

Fixed deposits have increased, but the free class shows a heavy reduction, and the total of the two classes is less by £1,197,599. Hpwever, the total of advances and discounts is less by £1,556,261, and the net result of this is that the deposits are in excess of advances by £43,538, as. compared with an excess of advances of £315,124 in the June quarter. Note circulation is less by £394,090, duo to spending power being lower at this time of the year, when there is less employment. Government deposits are also reduced. The?e movements are partly seasonal parison, freed from these influences, we take that afforded by the figures for the September quarter of recent years. Taking first the deposits, we find the movements in the past five years as follow COMPARISON OVER FIVE YEARS,

The free deposits show a reduction of £3,165,124, and are the lowest in seven years, but the fixed deposits have an increase of £1,146,937, and are 60 per cent, heavier than. four years ago, the higher interest rates having attracted over ten' millions in that time. The total of the two. classes has decreased £2,018,187 in the year, but is about on a level with two years ago, and is, ahead of earlier years. The position is very different from a year ago, as the export season just closed■■ has been a very poor one, and it was not till the last two months that imports really began to decrease to any extent. This is the cause of the reduction in deposits, and it is , also responsible for an increase in advances, as is shown in the following comparison:—

The total shows an increase of £2,968,910, and is the highest on record for the September quarter. This is a substantial increase in the year, and the now current' quax-ter may bo expected to show a further increase, as demands for assistance are usually heaviest during this quarter. Atpx-esent advances are practically an a level with deposits, as will bo seen from tho following comparison:— Advances and deposits compared.

of advances. Ta 1928 and 1929 we had a very flush period for the available supply of funds, following on two good export seasons, but this surplus of funds has now : dwindled away as tho result of a poor export season. Deposits are only just ahead of advances, and though advances were fairly stationary throughout August and September, they are likely to increase in October and November. The present level of advances is considered quite high enough, and if it shows a tendency to go much higher, the banks may find it advisable to put the brake on in some form to keep the total down. However, the present position compares very favourably with 1926 and 1927, and wo do not anticipate any drastic curtailment of credit. The shares of the different banks in these deposits are as under:—

Tho Union Bank has a,flight increase in deposits and the Bank of Australasia and National Bank show a light reduction in advances, but otherwise there is a general decrease in deposits, and increase in advances. Government deposits arc £800,960 more than a year ago, and the banks’ holdings of Government securities , are £223,975 less than last year. The only other features of the returns that are of any general interest are the note circulation and metal holdings, which compare as under:—

Thb note circulation is n little lower than usual, probably on account of general conditions and unemployment reducing the general spending; power. Metal holdings have been reduced in the last three years by tho export of gold not required locally now. Tho returns generally present a satisfactory condition of finance, considering the poor export season just concluded With a drop pi nearly nine millions in-exports, it is. very gratifying to see the supply of'funds beeping up so well. The banks are in a much hotter, position than in 1926 and 1927, and, provided imports are kept down to n reasonable level, the banks should not experience any inconycnience' in meeting all legitimate requirements for financial , assistance.

However, the outlook for prices for wool, meat, and dairy produce for the coming season is not very happy, and a generally lower scale of prices may be expected. Against this production will show an increase to set off tho lower prices to a great extent, and a fairly good total for exports may bo anticipated. The banks will doubtless koop a linn hold on advances,:but are in a satisfactory position lo‘ meet all reasonable demands; and the financial outlook is quite stable and satisfactory.,

Frco deposits ... Sept., 1530. June, 1930. ... ,<720,803,171 , 225,804 Final deposits 31,747,208 30,522,174 Government deposits 3,000;100 - 5,099,349 Note circulation ... 0,039,175 0,433,265 6,838,877 (1,843,507 Coin and bullion ... Discounts ... 1,107,061 1,188,090 ... . 51,399,840 52,874,172 Advances ... .... ...

— Deposits.— Sept. qtr. Free. Fixed. Total. 1930 ... £20,803,171 £31,747,208 £52,550,439 1929 ... 23,908,295 30,600,331 54,568,620 1928 ... 23,314,954 29,251,064 52,596,018 1927 ... 21,815,504 23,398,246 45,213,750 1920 ... 24,907,961 21,074,893 , 45,982,853

—Advances and Discounts — Sept. qtr. Advances., Discounts. Total. 1930 ... £31,399,810 £1,107,061 £52,506,901 1929 ... 48,543,601 994,387 49,037,991 1928 ... 43,947,154 1,171,970 45,119,424 1927 ... 47,415,363 1,399,808 48,815,231 1920 ... 46,692,451 . 1,631,493 48,323,964

Sept. Excess of quarter. Deposits Advances. deposits. 1930 ... £62,550,429 £53,506,901 £43,538 1929 ... 54,568,626 49,537,991 5,030,635 1928 ... . 52,596,018 45,119,424 7,476,504 1927 ... 45,213,750 48,815,231 3,601,481* 1928 ... 45,213,750 48,323,946 2,311,093* 1923 ... 47,753,425 41,975,360 2,778,065 1921 ... 45,123,026 43,933,081 1,189,945

Bank. Deposits. Advance New Zealand ... . .. £25,374,151 £23,832,638 Union 5,944,377 5,933,127 New South Wales ... 0,315,225 6,730,395 Australasia ... ... ... 4,936,010 4,894,070 National , ... 8,365,170 0,432,054 Commercial 1,614,897 1,684.608

Note Coin and Sept, quarter. ■ circulation. bullion. 19S0 ... .. £6,039,175 £6,838,877 1920 .. 6,272,351 , 7,109,873 1928 6,166,288 7,350,045 1027 ... ... 6,379.329 7,878,626 1926 .. 0,135,438 7,792,332