BANK OF NEW ZEALAND.

New Zealand Herald, Volume XXVIII, Issue 8541, 15 April 1891, Page 6

BANK OF NEW ZEALAND.

MEETING IN LONDON. The half-yearly general meeting of the proprietors of the Bank of New Zealand was held on February 25, at the Cannon-street Hotel, London, Mr. Richard H. Glyn presid-

og. The Secretary (Mr. C. G. Tegetmeier) laving read the notice convening toe meetQO* t s;i ie Chairman (who was received with ap>lause) said : Gentlemen, as you are aware rom the short circular which lias recently >een issued by the Board, we do not preient any accounts' to you at this meeting, t is intended in future to present the accounts yearly, made up to the 31st March, ind an alteration to that effect was duly nade in the deed of settlement and approved iy two meetings of shareholders. The reason ,vhy we are compelled to depart from the justom of our predecessors, who, I believe, ssued their accounts twice a year, is the ;ransfer of the Globo Assets to the Bank of STew Zealand Estates Company, a matter ,vhich was very fully explained to you by Sir Fames Fergusson at the meeting in August of ast year. The effect of this transfer has been ; his, that the Bank lias lost the direct control if the property, and holds in its stead the jntire share capital of the Estates Company. this amounts to a very large sum—very learly £2,(XX),and on these shares we uticipate we shall receive substantial and gradually increasing dividends. from ;he nature of the business of the Estates Company, they can only make up their accounts once a yearthat is to say, up to the {Ist March of each year—consequently, we shall only receive our dividend once in the year ; and, although in the half-year which »nds on the 30th September we shall have Darned a certain proportion of the profits, we cannot get them into the Bank's accounts, because we shall not have received them in the shape of dividend from the Estates Company. It is therefore impracticable co present to you a correct account of the position af the Bank but once a year. We shall have two meetings in the year, one in tins month and one in the month of August. We shall submit the accounts in August, and we have taken powers to pay interim dividends. Now, when we consider the position of this Bank in the half-year under review—that is to say, from March to September last the uncertainty as to whether the Globo Assets could be put into a liquid condition, the general distrust in which the Bank was held, which compelled the great contraction of loans in order to provide a large reserve for eventualities, we could not have expected but that the earning power of the Bank should be exceedingly crippled, and no doubt it was so; but it is not unsatisfactory to know that the accounts that have been duly audited by Messrs. Price, Waterhouse, and Co. show, subject to adjustment with the Estates Company, and after providing for bad debts, which, I am very glad to tell you, were very moderate, an amount of profit sufficient to pay a dividend, speak ing roughly—l cannot give you the exacl figures—at the rate of 6 per cent per annum (Applause.) We felt, however, that it vvouli not be prudent at this early stage to com mence paying dividends, although we shoulc have liked to have done it, because we arc very well aware that the share holders have been a very long time with out any. We concluded that the most prudent plan, both in the interests o the Bank and the shareholders was t( carry forward the balance, and we shall dca with it when the accounts are made up oi the 31st proximo. The first duty that de volved upon the Board when it took offici was a very important one, namely, that o selecting a suitable gentleman for the office o general manager. We should have been ex ceedingly glad if we could have taken soim officer from the Bank for this post, because i is the wish of the Board that the prizes ii the Bank should go to those who have served us long and with ability, but we felt that there were exceptional circumstances in this case. We felt that it was exceedingly desirable that new blood should be introduced into the Bank. Of course, there was this very obvious advantage in taking a man from this side, that we were enabled to make his personal acquaintance, to judge of his ability, and in concert with him to lay down the lines of policy which we intend should be carried out in this Bank, which we could not have done in anything like so convenient a way by correspondence with anybody in the colony, however able he might have been. At the same time, I wish it to be understood that there are certainly in the Bank several gentlemen who would have filled this office creditably if it had been thought desirable to appoint them. We felt this a much more difficult business than we at first anticipated, and it involved considerable delay, but that is better than sending out to such an important position anyone of whose ability we were not absolutely assured. We eventually selected Mr. William Turton Holmes. This gentleman was at the time manager in Jolombo of a branch of the Madras Bank, m institution well and favourably known, tie was recommended to us by a personal friend as a gentleman of great ability, of *reat strength of character, and very well suited for the position that was vacant. We We had some conversation with him. He was at home, I think, for a month before lie started for the Colony, and the Board arc ;lad to be able to say that the opinion they formed of him bore out the views which were expressed to us by the gentleman who recommended him. Mr. Holmes is in the colony, and he either is, or is on the point of taking up his position. He will, course, supersede the gentleman who has been acting as manager for some time, Mr. John M. Butt. Now, 1 think, the Bank are under great obligations to Mr. Butt, and I am glad to have an opportunity of expressing them, for the zeal and fidelity lie lias shown in the interest of the Bank during what must have been most arduous and trying times. He has the interest of the Bank most thoroughly at heart, and I trust that, as second to Mr.'Holmes. we shall for a long time have the benefit of his large colonial experience. Our best thanks are also due to those gentlemen who have acted as the local Board in the colony as representatives of the London Board during the interregnum, which was caused between the dissolution of the Auckland Board and the arrival of the new general manager. They stepped into that position at a critical period, and we are exceedingly indebted to them for their services. And here I may refer to a matter which has been frequently mentioned by individual shareholders, that is, the question of the appointment of a permanent local Board. There is a great deal to be said both for and against a local Board, but we have come to the conclusion, for the present, at any rate, not to appoint one, and we have been very much influenced in our decision by the advice of some of the most tried and trusted friends of tlie Bank in the colony, gentlemen whose co-operation we should feel entitled to obtain a,s local directors, had it been decided to appoint a local Board. The conclusion we came to was that a local Board was rather apt to weaken a strong general manager, and we think that Mr. Holmes will turn out a strong general manager, and that lie will be able to do without that assistance, particularly as lie will have the experience of Mr. Butt at his work, and there arc many friends of the Bank in the colony who will afford Mr. Holmes every assistance and advice he may require. Now i come to an important point rather, and that is the change which has come over the Bank during the few months that this Board has been in office, and it is very gratifying to lie able to say that that there are most distinct signs of a renewal of confidence in this institution. (Cheers,) Perhaps the best evidence of this is the steady and gradual progress of the deposits in the colony, and in spite of reduction in the rate of interest to -U per cent., which, I believe, does not usually attract much money to a colonial bank. As regards the London deposits, they show a marked sign of improvement. Moreover, the large amount of money which we have received from the sale of debentures of the New Zealand Company will add to the earning power of the Bank, and has enabled us to take up as much business of a desirable character as is offered, which, of course, was impracticable during the period between March and September last year. We think, also, we shall be able to save something in the working expenses of the company by reorganising the staff, without, I think, impairing its efficiency. That has been begun, but it is necessarily a matter which can be so much better attended to in- the colony, and that had better stand over until Mr. Holmes ar- • rives there. Now, as regards the Estates Company, in which we have a very large interest, their matters have been taken up most energetically by their Board here and their representatives in the colony, and the sale of properties, so far as they have gone, has been satisfactory. I may tell you that even within the last few days a telegram has been received from Auckland stating that the large asset of the Estates Company, which at one time loked as if it might give rise to trouble or delay, has been satisfactorily arranged. Now, gentlemen, I hope you will not in the least infer from what I have said that this Board underestimates the difficult position of the task they have taken up. On the contrary, wt know perfectly well that no change of hear: office from the colony to Loudon, or change of your Board, or change of management is going to raise this Bank, or any bank, to i position of high credit from the conditio! into which it has been allowed to get. Or the contrary, it is a question of time, am there must be considerable labour and con siderable skill employed by everyone con neoted with the management, ' from th< highest to the lowest, until this Bank can b< put into the position of high credit it for merly occupied; but I think thi3 mucl

we can say, because. it is proved, that the company has turned the corner, and. it shows most distinct signs of progress in the right direction. Although the head office of ' the Bank has been removed to London, we have not by that means been turned into a London bank. We were instituted, as I understand it, tor tne promotion of the welfare of.the colony ot New Zealand, and that will be the policy ot the Board in the future. I fancy that it is not improbable that some of our competitors there may make capital by saying that we are a foreign institution, and that the sympathies of the Bank will not be with the colonies so much as they were in former days. This is not the fact. It is our intention to continue the Bank as a New Zealand bank, and in the interests of New Zealand and the New Zealand colony. Our prosperity is so much bound up with that of the colony that it is encouraging to have advices on all sides of the progress that trade is making there. You have all seen, no doubt, the official statement that the surplus revenue expected is something like £158,000. Vi e have receivcd a telegram from Auckland this morning which is of a very encQuraging nature. The telegram is as follows: — Last settlement making rapid progress, v ery satisfactory expansion of trade. Exports for 1890 nearly £10,000,000, being £3,000,000 in excess of imports." You might perhaps say that that is more or less prejudiced evidence, but through the kindness of Sir James Fergusson I have an independent report made by the United States Consul at Auckland for his Government in Washington, and you will hear what he says about it. This report, which is made by Mr. Connolly, is as follows : — ' Outlook in New Zealand continues bright and hopeful. The prospects of increasing and continuing prosperity are more encouraging than for a number of years past. The colony has settled down to a slow but certain pace in the race for population and wealth. Its resources are being developed upon a more permanent and substantial basis, as may be seen from a glance at the large increase of exports oyer imports during last year." He then says her position as the most productive colony ill Australasia is firmly established, as a comparison with the tables shows. After giving the tables, which I need not trouble yon with, lie concludes .as follows : —"lt will be seen from the above table that New Zealand, in proportion to population, is the greatest wealth-producing colony of the Australasian group. There is not the slightest doubt as to the great future before New Zealand, -provided ordinary caution is observed in the management of her affairs. ' Perhaps it might not be unfair to substitute for the name of the colony the name of the Bank. (Applause.) In the case of this prosperity we hear of, the Bank will have its fair share, and you may rely on the best eflorts being given to promote the success of the Bank. I hope on your part, gentlemen, that you will give us your confidence in a business which cannot fail to be more or less a difficult one, and I am afraid we shall also have to ask you to exercise your patience a little longer, for it is very evident for some little while to come we shall have to be content with moderate dividends, and to devote a large proportion of our profits to the establishment, as quickly as possible, of a good and substantial reserve fund, if we wish to be able to compete on an equal basis with the other banks in the colony. Now, I know from experience that there are a good many persons who take a grout personal interest in the welfare of the Bank; and, in conclusion, I should like to tell you how I think you can help the Bank very much—you can use your personal influence with your friends to keep their accounts with us and to deposit their money with us. and you can do th with advantage to the Bank, and without the least risk to your friends. A good deal has been said recently about the cash reserves of banks. By the latest advices we had as to the proportion of our resources to our liabilities the difference was nearly 14 per cent., which is a most respectable showing. Then our capital has been written down low —in fact, some people think too low. The large asset of the Estates Company is showing by actual results that it lias been conservatively valued, and behind that there still remains the reserve liability of the shareholders, which amounts to no less than a million and a-half. I think that is all I have to say to you to-day, and I have no resolution to propose, nor is there any business before us. At the same time, if any shareholder has any questions to ask I shall be happy to answer to the best of my ability. (Applause). , After a few general remarks, Captain Dibley said : Gentlemen, I think before we go we have a very pleasant duty to perform, and that is to tender our very best thanks to the Board of Directors and the officers of the Bank generally for the intelligent interest they have shown in our welfare. The statement we have heard to-day is very different to what we heard on the last occasion, and the Board may to the fullest extent rely upon the co-operation anil sympathy of the shareholders. I have very much pleasure in moving a cordial vote of thanks to the Board of Directors and the officers of the Bank. (Applause.) Air. Collins : I have much pleasure in seconding that motion, because I think it is in every sense of the word deserved. I have listened with intense interest to the very satisfactory explanation which the chairman gave to the meeting, and I believe it is the judgment of every in this room that we have unlimited and implicit confidence in the Board as now constituted— (applause)and I am quite prepared to wait any reasonable time for the results which we hope and firmly believe will be achieved. I do not forget a remarkable statement made at the last meeting we had, when Mr. Mundella told us that during twenty years the total losses of the London brunch of this Bank did not exceed £I(X.K). Such a statement took me by surprise, but 1 had it confirmed, and I am Sure that we can, with gentlemen who have shown in the past sc much tact and judgment in the management of the Bank, still continue to give them our utmost confidence. (Applause.) The resolution was put and passed by acclamation. The Chairman : Gentlemen, on behalf of the Board and myself personally, I beg tc return you our very best thanks for the confidence you have shown to us, and especially to the mover for the kind expressions he has used. We shall, of course, require youi confidence, and we hope that you will back us up. We shall do what we can to manage the Bank conservatively in the interests both of the shareholders and of the Bank. The proceedings then terminated.