BUSINESS OF THE BANKS.

Hawera Star, Volume XLVII, 30 July 1928, Page 11

BUSINESS OF THE BANKS.

DENIAL OF LARGE PROFIT. CONTRARY RESULT CLAIMED. In a. recent criticism of the banks, made by Mr. H. E. Holland, M.P., in the House of Representatives 1 , he quoted the aggregate bank returns to show a. profit of £120,000, by the addition of f per cent, to the depiosit rate, and a like amount to the minimum overdraft rate, as from May 9, 1927. Banking experience, as the accurate figures show, is the contrary, according to one authority. For tifte year ended June 30, 1927, the 'average of advances was £50,288,000, and the addition of f per cent, on the minimum rate would have given an increased profit of £251,440. But the position was that at June 30, 1928, the advances had contracted to £47,518,000, a decrease for the period of £2,770,000, so that the profit was decreased by £193,900, represented by loss of interest thereon at 7 per cent., giving a. net increased return to the banks of only £57,540; As to fixed deposits, these at June 30, 1927, amounted to £21,255,000, and i per cent, additional paid on them by the banks represented an increased payment or decreased profit of £106,275. The fixed deposits, however, increased during 1927-28 until at June 30 they were returned at £25,152,000. an increase of £3,927,000, the interest on which at 5 per cent, represented a. decreased orofit to the banks of £196,250. The' loss due to the increased amount paid in the rate' for fixed deposits was in all £302,525. Increased profits, however, from the enhanced overdraft rate for the year ending June 30, 1927, amounted to £57.540. This- sum. deducted from £302.525. leaves a deficit to the hanks of £244.985, instead of the extra; profit of £210.000. which Mr. Holland is reported to have said they made. Moreover, the figures quoted by Mr. Holland were for the December quarter.