THE BANK RETURNS.

Lyttelton Times, Volume CXVIII, Issue 18304, 14 January 1920, Page 6

THE BANK RETURNS.

The returns of the banks for the December quarter v of last year teli tho old familiar story of soaring figures which has been a feature of the war and postwar period. In the last five years private deposits have grown from 24.4 millions to 45.5 millions, an advance of some 85 per cent —mainly through the non-taxation of war profits. ' In the same period the publio debt has grown by about 100'millions, and the taxation is tho highest in the Empire. When reviewing the banking returns for tho previous quarter we pointed out that the surplus of deposits over advances of fifteen millions was then a record, and wo expressed the opinion that shipments of produce going forward would largely counterbalance the effect of the raising of tho war loan, and that consequently, when the present figures came out, the banks would still bo showing a heavy surpus of funds in hand. These anticipations are fully borne out, the figures now showing an excess of deposits of £13,463,221. This is £1,759,892 less than in th© previous quarter, advances having increased partly owing to the usual season's demands for accommodation at the early part of the produce season and partly to war loan subscriptions. The surplus is, however, over six times as much as was shown a year ago, and the returns give every indication of a continuance of a plentiful supply of funds. Tho principal figures in the latest return compared with those of three months ago are as follows: — Deo., Sept.

1919. 1919. £ £

The total of tho two classes of private deposits is slightly ahead of the previous quarter, but tho increase is all in the interest-bearing class. Government deposits are, of course, heavier on account of tho loan. Advances and discounts together aro heavier by two millions, which is the usual movement for this time of year. Metal holdings show a light reduction, but Government securities have increased by over a million. A more interesting comparison is obtainable by taking the corresponding quarter for the last few years. Deposits havo moved in five years as follows:

Dec. Quarter. Free. Fixed. Total,

These figures help to reveal the effect of the war on finance and what war prioes have done for New Zealand. There is an increase of 10$ millions in the last year and a similar amount in the four previous years, making 21 millions in the five years. The bulk of the increase is in the free class, which shows that there are a large number of credit balances on current accounts. Roughly, the free deposits are equal to the amount of the advances. The growth in banking business generally is demonstrated in the following comparison :

Deo. Qu-rtor. Assets. Liabilities.

This'shows that in the six years liabilities have increased roughly twice as much as assets, and both increases are very heavy, showing clearly what the expansion in banking business has been. In 1913 there was an excess of advances of a million as compared with an excess of deposits now of 13J millions, which nearly accounts for the difference between the growth of total assets and total liabilities. Wo turn now to a comparison of advances for the pnst six years.:—

The increase in advances is not nearly so striking as that of deposits, being roughly seven millions, or 28 per cent, as compared with 21 Bullions, or 85 per cent, in deposits. Tho higher prices of all commodities is chiefly responsible

for the increase in advances, and in tho same way higher prices for produce aro responsible for the balk of the growth in deposits. As the relationship of deposits and advances is the chief factor governing the supply of funds, we give a comparison of these two items:—

Excess of D«o. Quarter Deposits. Advances. Deposits.

Prior to 1914 it was not uncommon for th© December quarter to show an excess of advances, owing to the heavy calls for assistance in that period of the year. Tho present excess of deposits stands out quito by itself in the abovo comparison. The shares of the different banks in theso advances and deposits are as follows:

Tho only other items of general interest are tho noto circulation and tho metal holdings, which compare as follows:—■ Note Clr- Coin and Deo. Quarter. culation. Bullion.

The note circulation continues to expand, but metal holdings are a little less than in tho last two years. There is not any material change, generally speaking, in tho last three months. The figures simply afford additional proof that the war has been very profitable to some New Zealanders.

Deposits, free 90,138,063 30,331,318 Deposits, fixed 15,433,913 15,041,563 Deposits, Government 7,491,196 6,095,305 Note circulation . . 7,254,412 7,357,047 Discounts 1,413,704 1,863,903 Advnncos . . 80,693.051 28,785,870 Coin and bullion , 7,8G2,416 8,046,071 Government securities ' 6^414,873 5,252,331

1919 8 . 80.136.06S 1S.433 913 45.S69.976 1918 . 20.538.863 14.466.977 35 003.845 1917 . 18.496.717 13.777.POO ,3? "74 517 '1916 . 18 031.742 18.9.50 075 SI .260 817 191S . 17 5W.7M 11 PR" .W3 29.150.30^ 19H . is,crrs,480 10,727,6*) 2i,409,l(XJ

(1919 : 1918 T 7 42,801,275 60,703,775 . 31,802,377 26,778,395 Increase . .£17,498,895 £33,925,378

Deo. Quarter. Advanoes. 1919 . 80.693,051 1918 . 31,739,143 1917 . 25,6G2,981 1916 . 25,293,408 1915 . 22.589,137 1914 . 23,121,230 Discounts £ 1,413,704 1,313.918 1,668,252 1.453,703 1,811,573 . Total. & 82.1/16.755 83,076.081 8l.000.B15 2C96G.630 24.042- WO 24,932,809

£ £ £ 1319 . ,45,569,973 82,105,755 13,463,221 1918 . 85,003,813 88,073,081 1,930,781 1917 . 32,274,517 31,000,315 1,27-1,202 191G . 31,260,817 28,966,eG0 4,291,187 1915 . 29,155,303 2-1,012,810 6,112,462 1914 . 24,403,100 24,932,809 ♦529,709 *Excoss of advauoo3.

Deposits. £ 21,879,(09 Advances. £ Bank of New Zealand . 14,995.337 Union Bank 5,468.452 4,400.631 Bank of N.S/W. . 6,033.932 0,094,020 Bank of Australasia . 4,351,143 4,045.961 National Bank 7,091.437 4,410,192 Commercial Bank 745^153 468,614

,£■ £ 1919 . 7,234,412 7,862,116 1918 . 0,761,705 8,123,223 1917 , 0,161,094 8,010,770 1916 . 4,778,267 7,088,098 1915 . 8,097,815 6,950,517 1911 . 2,611,231 6,209,113