REDUCED DIVIDEND

Nelson Evening Mail, Volume 76, 20 June 1941, Page 5

REDUCED DIVIDEND

BANK OF NEW ZEALAND DECLINE IN TRADING PROFITS ANNUAL MEETING OF SHAREHOLDERS Wellington, This Day, Moving the adoption of the report and balance sheet of the Bank of New Zealand at the annual meeting of shareholders, Mr T. A. Donnelly, chairman. announced that it was proposed to pay a further dividend of 3 per cent making 8 per cent for the year. Explaining the reduction from the former 10 per cent dividend, he said, “You may recall at the last annual meeting that I made reference to the decline in the bank’s trading profits, explaining they were insufficient to meet the outgoings and pay a dividend of 10 per cent to the shareholders, but that a substantial sum set aside for British income tax had been released and taken back into the profits, enabling the 10 per cent dividend to be paid. The re« suit of this year's workings under similar restrictive trading conditions, but with even heavier taxation and uncertain outlook for future, made it necessary for the board, much to it* regret, to reduce the final dividend from 5 to 3 per cent.” A bonus of 7£ per cent to the stall was being maintained said Mr Donnelly, who pointed out that the highee cost of living had been recognised by the Arbitration Court, which granted a general 5 per cent increase to award workers, “The Bank staff did not participate I may say.” He added that the bank’s reduced earning power and the uncertain conditions made it necessary to limit the annual staff salary increments to officers on the scale and to those who received promotion during the year. The chairman stated that in view of the present uncertainties caused wholly by the vital struggle in which the Empire was engaged he would confine his observations to the balance sheet items and not deal generally with economic matters. The long term mortgage debenture stock of £500,000 which fell due in London in November last had been repaid with the exception of £I7OO. Unpresented deposits, free and fixed showed a net increase of £3,168.581 and as fixed deposits had shown s further decline during the year the increase in free deposits war therefore greater than the net increase shown It was natural that free deposits should increase considerably during the period of restricted imports and the heavy war and civil expenditure. INCREASING TAXATION The board considered it advisable in. view of the increasing taxation in New Zealand and elsewhere to add £150,000 to the reserve for taxes, making a total of £576,000. The total taxation paid by the bank for the year ended 31st March was £514.000. NEW CONVERSION ISSUE The chairman explained that the Increase of £955.836 in the total of £7.022.099 of money at call and short notice. Government and other securities in London, had no special significance.

The bank's holdings of New Zealand Government securities total £8,357,002. rhe bank had made application, said Mr Donnelly, for the conversion of its considerable holding of old loans into the Government's new conversion issue. Municipal and other local body securities at £546,732 had increased by £291,982 due to the bank taking up further loans for investment. The increase of £1,536,123 in advances and bills discounted was due largely to the financing of the country’s produce, pending shipment or purchase by the Go\ - ernment. TRIBUTE TO STAFF Mr Donnelly announced that the board had re-elected him chairman for the ensuing year, and the term of office of Mr A. E. Mabin would expire on 31st March next and he would again offer himself for re-election as a member of the board. Expressing appreciation at the efficient services of the staff in New Zealand and overseas Mr Donnelly said they were working under considerable difficulties due to the steady drain bv enlistments. These difficulties would be felt more acutely in the future as further men were called up and released. A considerable number of young women were being trained to fill the vacancies on war duty. ' vish ,f pecially to mention” added Mr Donnelly “the services of our London staff who had carried on the bank's business in the city without interruption. despite the fact that our premises recently damaged by a bomb, had to be Business was immediately resumed m adjacent temporary quarters and we are now advised that repairs to our own premises are in hand It is expected that they will be readv for re-occupation in a few weeks. Our London staff prepared to work in the city lather than move to an emergenev country premises which we provided * xr y s,ases ihe "•» »*-