BANK RETURNS

Manawatu Standard, Volume LIV, Issue 111, 10 April 1934, Page 2

BANK RETURNS

RECORD DEPOSITS. LOW LEVEL OF ADVANCES. The outstanding features in the returns of average liabilities and assets •of the six trading banks in New Zealand for the first quarter of the year are that the total of free and fixed deposits at over £61,000,000, is the highest ever recorded; that advances and bills discounted at £41,575,526 are at the lowest level for ten years ; that the excess of deposits over advances, at more than £19,500,000, is the highest since the war, and that Government securities held by the banks have Increased since the December quarter by well over £3,000,000 to £23,453,377. The most satisfactory feature of the returns is the marked increase in free deposits, or current account balances, which at £21,657,550, are £3,000,000 higher than for the previous quarter. The principal changes disclosed by the latest returns, compared with those for the March quarter of 1933 are as follow 7 : £ Free deposits increased Fixed deposits increased 4,246,895 Government deposits decreased . 1,305,954 Advances decreased 7,623,405 Note circulation increased 289,810 Coin and bullion decreased 120,337 Government securities increased . 14,202,471 The follow'ing table gives a comparison of the principal items in the latest returns with those for the December quarter of 1933, showing the changes in three months: z l)ec. qr. Mar. qr. 1933. 1934. £ £ Free deposits 18,622,333 21,657,550 Fixed deposits 39,518,*653 39,455,883 Govt, deposits 1,139,812 1,190,649 Govt, securities 20,132,725 23,453,377 Advances 42,765,264 40,311,423 Discounts 986,713 1,264,103 Note circulation 6,366,631 6,294,631 Coin and bullion 5,054,918 5,093,418 INCREASE IN FREE DEPOSITS. The marked increase in free deposits, or current account balances, is a satisfactory feature of the latest returns. Compared with the figures of a year ago, the increase is £4,196,268. As compared with the figures for the quarter ended December 31, 1933. the increase is slightly over £3,000,000. Undoubtedly the improved returns from the export trade, notably wool and frozen meat, are reflected in the total of free deposits, which, at £21,657.550, are the highest recorded since 1930. All the banks share the increase, as is shown in the following comparative table : Mar., Mar., 1933. 1934. Increase. Bank. £ £ T

Total 17,461,282 21,657,550 4,196,268 FIXED DEPOSITS HIGH. The abnormally high level of fixed deposits is evidence that confidence in industrial enterprise a.nd other avenues of investment is stil Hacking. Probably, also, considerable sums which in normal times would be remitted to London by shipping, insurance and other companies are being held in New Zealand on account- of the high exchange rate. The following table compares the fixed deposits for the March quarter with those for the corresponding period of last year :

To t a i 35,208,988 39,455,883 4,24b,8y5 Fixed deposits have increased from an average of slightly under £oU,UUU,boo ill 1929 to nearly £39,500,000 tor the quarter just ended. Actually, however the figure for the March quarter ’is slightly less than that for the previous quarter. The highest monthly average (£39,765,154) was reached last October, since when the figure had fluctuated very little, with a slight downward tendency. Free and fixed deposits combined tor the March quarter reached the average of £61,113,433, the highest ever recorded in the Dominion. The fluctuations during the last six years are shown in the following table;— Total Mar. Free Fixed Dep. qr. £ £ 't

The improvement in respect of free deposits is a notable one. It will be seen that the average of fixed deposits is nearly £10,000,000 higher than for the March quarter of 1929, while free deposits are over £4,000,000 lower. The record average of total deposits at over £61,000,000 is neary £6,000,000 higher than for the March quarter of 1929. DECREASE IN ADVANCES. As compared with a year- ago, advances or overdrafts at £40,331,423 have decreased by £7,623,405, of which the figures for the two purely New Zealand banks account for £5,456,234. The position in regard to advances is shown in the following comparative table:— Mar., Mar., 1932. 1933. Decrease. Bank £ £ £

Total 47,954,828 40,311,423 7,623,405 Bills discounted by all the hanks for the March quarter average £1,264,103, which is more than double the figure of twelve months ago, and the highest for the last six years. The following table shows advances and discounts for the March quarter for six years—advances actually being the lowest for some ten year's : Mar. Advances. Discounts. Total, qr. £ £ £ 1929 45,175,304 1,184,440 46,359,744 1930 ... 52,447,136 1,229,643 53,676,779 1931 .. 53,264,390 1,067,844 54,332,234 1932 . ... 49,519,631 712,706 50,232,337 1933 47,934,828 565,446 48,500,274 1934 40,311,423 1,264,103 41,575,526 A comparison of the total deposits (free and fixed) with advances (including bills discounted) shows the banks’ indebtedness to the public to he over £19,500,000, this excess of deposits being the highest 0 n record. The position for the March quarter for the last eight years is shown in the following table: Excess ot Mar. Deposits. Advances. Deposits,

•Advances rose materially during the first stages of the depression, and. it

was not until 1932-33 that a definite downward movement set in, which has since been greatly accelerated. The minimum overdraft rate in 1930 was 7 per cent., as compared with 5 per cent, to-day. The position of the various banks in regard ho total deposits and advances is shown in the following table: Total Total Deposits. Advances. Bank. £ £

Total £61,113,433 £41,575,526 A notable feature of the latest returns is that the Government securities held by the banks have risen during the last twelve months by over £14,000,000 to £23,453,377, this representing an increase during the last three months of £3,320,652. The following table compares the note circulation and holdings of coin and bullion for the March quarter for the last seven years; Gold coin Note and Mar. circulation. bullion, qr. £ £

The table shows that .notes in circulation increased during the last quarter to the highest level since 1930. There has been a further decline in coin and bullion holdings.—Dominion.

8,173.514 9,814,848 1,641,334 3,120,639 3,815,697 695,058 2,017.051 2,716,639 699,588 N.S. Wales .. 1,871,579 2,361,484 489,905 Australasia .. 1,543,187 1,951,681 408,494 Commercial .. 735,312 997,201 261,889

Mar., 1933. Mar., 1934. Increase. Bank New Zealand National £ £ £ 17 800,417 19,236,051 1,435,634 6,016,549 7,180,422 1,163,873 3 799,931 4,402,736 602,805 N.S. Wales ... Australasia .... Commercial ... 3,898,686 2,999,146 694,259 4,395,332 3,400,958 840,384 4yb,b4b 401,812 146,125

1929 .... . . 25,736,743 29,608,752 55,345,495 1930 .... . . 23,905,822 30,097,419 54,003,241 1931 .... .. 18,329,853 32,922,036 51,251,939 1932 .... .... 16,998,822 34,466,289 51,465,111 1933 .... . 17,461,282 35,208,988 52,670,270 1934 .... ... 21,657,550 39,455,883 61,113,433

New Zealand National 22,034,512 17,783,616 4, 8,473,674 7,268,336 1,205,338 5.628.327 5.028.473 590,854 N.S. Wales .. Australasia ... [lommercial ... 5,795,289 4,623,344 1,379,682 5,050,339 3,896,722 1,283,937 744,950 726,622 95,745

qr. £ £ £ . 45,528,813 50,800,808 *5,271,995 . 49.958,295 46,070,370 3,887,925 1Q2P 55,345,495 46,359,744 8,985,751 . 54,003,240 53,676,779 326,461 51,251,939 54,332,234 *3,080,295 . 51,465,111 50,232,337 1,232,774 , 52,671,270 48,500,274 4,169,996 1934 ... ... 61,113,433 *Excess of 41,575,526 advances. 19,537,907

New Zealand ... ... 29,050,899 18,928,207 National ... 10,996,119 7,293,262 Union ... 7,119,375 5,038,264 N.S. Wales ... 6,756,816 5,073,242 Australasia 3,946,122 Commercial ... 1,837,585 1,296,429

1928 6,376,668 ... 7,867,459 1929 ... 6,370,894 ... 7,263,361 1930 .. 6,417,038 ... 6,648,838 1931 . 5,802,261 ... 6,955,422 1932 .... 5,875,025 ... 6,598.701 1933 .... 6,004,821 ... 5,213,755 1934 6,294,631 ... 5,093,418