Bank of New Zealand Long-term Mortgages

Manawatu Times, Volume XLIX, Issue 3445, 6 September 1926, Page 7

Bank of New Zealand Long-term Mortgages

Capital to be Increased by Million and Half Thirty Seven Years Currency Interest Rate Six Per Cent The Bank of New Zealand, which was introduced to the House on Saturday, authorises an increase of the Bank’s capital by £1,406,250, in ordinary fl shares, to provide funds for its proposed long-term mortgage scheme, and the Bank is authorised to raise this money by the sale of debentures.

[By Telegraph.—Special to "Times.”!

WELLINGTON, Last Night. The Bank of New Zealand Bill, authorises the Rirectors to increase the capital of the Bank by £1,406,250 in £1 ordinary shares, for the creation of a long-term mortgage fund. The Directors are empowered to borrow money on behalf of the Bank, by the issue of debentures, or debenture stock, having a currency of 37J years. The amount of the debentures, and debenture stock outstanding at any time, shall not be greater than three times the amount of the capital paid up upon the shares created under the Bill, and trustees may invest in such debentures oi stock. Thirty-Seven Tears Loans. Moneys constituting the long terra nortgage fund may be advanced on first mortgage of freehold or leasehold lands, the term of the mortage to be 37' years. The amount of advances is not to exceed two-thirds’of the value of the security, in the case of freehold, or one half of the value o fthe lessee’s interest in the case of leaseholds. The rate of interest on thse advances is not to exceed six per cent per annum. The remuneration of the Director ate of the Bank is increased from £SOOO to £6500. Position of Other Banka. When the Bill was introduced, Si* Joseiph Ward asked the Minister c” Finance, if, independently of that

measure, the clause was being introduced to ensure that all the Banks in the Dominion should have the same terms and conditions for longdated loans, as the Bank of New Zealand was to have. Facilities Open to ail. Hen. W. Downie Stewart said it had been stated that similar facilities would be granted to any other lending Institution which was willing to give long-term mortgage loans. It had been stated that those facilities would be given if other Banks desired them. If a general clause were inserted in anticipation of any proposals that might be put forward, the proposals might be so dissimilar in nature, as compared with the terms and conditions in respect to the Bank of New Zealand, that it might not give the required assistance. Cases Decided on Their Merits. The facilities to be given would depend upon the position of each Bank, and if it were merely stated that a concession would be made on certain lines, the position might not be met at all. Applications would havo to be considered carefully as they were received. The concession to the other Banks might take the form of special taxation. Each case would have to bo scrutinised very carefully. The Government was not making a taxation concession to the Bank of New Zealand. It was putting in its own money at 6 per cent.