BANK RETURNS

Evening Star, Issue 21381, 7 April 1933, Page 11

BANK RETURNS

A MUCH IMPROVED POSITION DEPOSITS UP, ADVANCES DOWN AMPLE FUNDS AVAILABLE [Special to tee ‘Star.’] WELLINGTON, April's. The returns of the six banks trading, in the dominion show a very much improved position for the March quarter as compared with the preceding December quarter, and also show quite a good measure of improvement on tho March quarter of last year. During that quarter the excess of deposits averaged £l,232,774, but was higher at the beginning of the quarter and declined during the quarter. This year, however, the excess of deposits has steadily increased, and at March 14 was £6,360,811, while at the beginning of the quarter the deposits were only £185,492 more than the advances. This increase is due to realisations coming in from our exports, while importation is still on a light scale. The figures now under 811, while at the beginning pf the quarter. Deposits averaged £52,670,270 and advances £48,500,274, leaving an ■excess of deposits of £4,169,993, compared with £227,595 in the December quarter and £1,232,774 in the previous March quarter. - The principal items in the return compare as follows with those of the immediately preceding quarter

Private deposits show an increase of £2,208,928. All in the free class and Government deposits have improved by £1,039,546. Discounts and advances together are lower by .£1,733,473, so that the excess of deposits shows- an improvement of £3,942,401 in the'quarter, and, as shown above, this excess was over £2,000,000 better towards the close of the quarter. Note circulation and metal holdings exhibit a light reduction, and Government securities aye less, showing that the Government is not leaning quite so much on the banks now. These are the movements for the quarter only, and are influenced by seasonal variations.To gain a more comprehensive and satisfactory survey of the situation we now compare the latest figures with those of the corresponding quarter of the preceding years. Taking first the deposits, we find the movements in recent years are as follow:

The total for the two classes shows a satisfactory increase of £1,205,159- in the year, and it stands at a very good level, taking into consideration the fact that the general level of prices, incomes, interest, and charges is lower now. A satisfactory .feature, from the banks’ point of view at any rate, is that the downward course of the free deposits has been arrested, and these show a fair share of the increase. Turning now to the other side of the ledger, we find advances and discounts ere lower than formerly, comparing as follows for the past five years;—

These figures show that the banks’ customers have succeeded in' reducing their indebtedness to the banks,by £l,732,063 in the last year, and by £5,832,000 in two years. This is a very satisfactory achievement, though it is largely due to the curtailment of int-

portation and the consequent reduction of stocks of imported goods. Tho figures also show that resort to discounting bills has not been nearly so touch in the last two years.. Here again the lower scale of prices, etc., probably has had some effect on the figures. The relationship of these advances to the deposits is the most interesting feature of the returns, as it is this factor that controls the supply funds available with the banks and these two main features compare as follow for the past seven years:— Excess of

The present excess of deposits is £2,937,222 better than a year ago, and is the best since 1929. We have gone back to 1927 to show how the good season for exports restored the situation. After the poor showing in 1927, the setback after 1929 seriously reduced the supply of funds with the banks, bub the latest figures show a very good recovery, and, as stated above, at March 14 there was an excess of deposits of £6,360,811; which puts thai banks in a very good position.- Tha Government, however, has absorbed a part of these funds by leaning on tha banks to the extent of £9,668,181, compared with £6,597,824 a year ago,, whereas the normal amount of Government securities, held by the banks is about £5,000,000. The shares of the individual banks in these deposits and advances compare as under:—

Thc Bank of New South Wales and the Bank of Australasia are the only two showing an excess of advances compared with a year ago. The Bank of Australasia is the only one with less deposits, and each bank shares in the deduction in advances. 1 Government deposits at £2,496,603 are £624,829 more than a year ago, while the hanks’ holdings of Government securities are £9,668,181, which is £3,070,357 inore_than a year ago. The only other items of any general interest are the note circulation and

The metal holdings have been reduced by the export of surplus gold coin not required' now. The note circulation is better than in the two preceding years, and compares farourably with 1929 and 1930 considering present condition and the lower range of prices now. Taking a general survey of the position as revealed by these figures, at is quite satisfactory. Deposits are up and advances are down, with the result hat the banks have nearly £3,000,000 more funds than a year ago, and during the March quarter the supply of funds has steadily increased, and it will probably; - increase further during the current; quarter, with the result that when im-, porters want to stock up again, or, other calls for funds come, the banks Will have ample funds available for ail legitimate requirements.

March December Quarter, Quarter, 1933, 1932. £ £ Free deposits ... ... 17,461,282 15,087,313 Fixed deposits ... ... 35,208,983 35,374,029 Government deposits 2,496.603 1,457,057 Note circulation 6,004,821 6,016,856 Discounts ... ... ... 565,446 617,004 Advances 47,934,828 49,616,743 Coin and bullion ... Government securi5,213,756 5,420.060 ties ... ... 9,668,181 10,103.064

1 Free Fixed March Deposits. Deposits. Total. Quarter, £ £ £ 1953 ... 17,461,282 35,208,988 52,670,270 1932 ... 16,998,822 34,446,289 51,465,111 1931 ... 18,329,853 32,922,086 51,251,939 1930 ... 23,095,822 30,097,418 54,003,240 1929 ... 25,736,743 29,608,782 55,345,495

March Advances. Discounts. Totals. Quarter, £ £ £ 1933 ... 47,934,828 565,446 48,500,274 1932 .. 49,519,631 712,706 50,232,337 1931 ... 53,264,390 1,067,844 54,332,234 1930 52,447,136 1,229,643 53,676,779 1929 ... ‘45,176,304 1,184,440 46,359,744

March Deposits. Advances. Deposits,. Quarter, £ > . ■ £ £ 1933 . .. 52,670,270 48,500,274 4,169,993 1952 . .51,465,111 50,232,337 1,232,774 1951 .. 51,251,939 54,332,234 *3,080,295 1930 . .. 54,003,240 53,676,779 326,461 1929 . .. 55,345,495 46,559,744 8,985,751 1928 . .. 49,958,295 46,070,370 3,887,925 1927 . .. 45,528,813 50,800,803 *5,271,995 * Excess of advances.

Total Total Deposits. Advances* Bank. £ £ New Zealand 25,973,931 22,339,598 Union ... 6,816.982 5,645,317 New South Wales ... 5,770,265 5.879,255 Australasia 4-,542,335 4,705,270 National ... ... ... 9,137,188 8,530,883 Commercial 1,439,571 1,399,950

metal holdings low:— which compare as fol« Note Coin and March Circulation. Bullion, Quarter, £ £ 1953 6,004,821 5,213,753 1952 5,875,025 6,598,701 1931 5,802,261 6,955,422 1930 .. ... 6,417,033 6,648,833 1929 .. ... 6,370,894 7,263,361