THE BANKING RETURNS.

New Zealand Herald, Volume XLVIII, Issue 14807, 10 October 1911, Page 8

THE BANKING RETURNS.

OUTLOOK PROMISING.

GOVERNMENT'S BIG DEPOSIT.

EXPENDITURE INEVITABLE.

ADVANCES' AND DISCOUNTS

INCREASE.

[BY TEUEGnArn.—special <

- ,- - _ - t ■YYeixinoton, Monday. THE bank returns for the September quarter are available, rather earlier than usual, and a comparison of the figures with those for the corresponding quarter of last year discloses movements that are favourable in many respects. The September quarter closes the produce year, and the figures are therefore specially interesting. There is an increase in the note circulation, pointing to activity within the Dominion. The deposits shows-expansion.

Turning first to the aggregate liabilities and assets the figures of each institution compare as under;— Liabilities. Assets. £ f' £ Bank of New Zealand 15,559.570 12,370.194 Union 3,486,569 4,553,503 New South Wales ... 3,633.774 4,284,687 ■Australasia 2.288,935 3,956,957 National 3,935,420 4,503,356 i Totals £28,904,268 £29.668.697 The assets thus exceed the liabilities by the moderate sum of £764,429, and it will be noted that the assets of the Bank of New Zealand are considerably less than the liabilities. This bank is, no d>.ubt, finding a more profitable use for its funds outside of New Zealand.

The advances show an increase cf £3,160,152 as compared with the September quarter of last year, the figures being £19,687,242 as against 6,527,090. A year ago the increase was only £153,809. '['hero is thus a very striking difference. The borrowers have been driven to the banks because they need the money to meet engagements, or else they gee v.rys of using the money profitably. If the latter is the case there will follow a strong revival in trade, but if the former is the true position, then there will bo great economy exercised, which must be a check on general business. All the banks shared in tho increase in advances, the figures of the respective institutions being as follows:—Bank of New Zealand, September, 1911, £7,466.966 (increase £1,295.602); Union, £3,327,813 (£295,550} ; New South Wales, £2.922,297 (£594,068); Australasia, £3,007,467 (£436,630); National, £2,962,699 (£538,302); total, £19,687,242 (£3,160.152). The discounts exhibit an increase of £93,911, while last year there was a shrinkage of £126,920. The expansion this year is somewhat significant, for it indicates pressure from some directions. The growth in the advances and discounts compared with tho movements disclosed last year is somewhat unhealthy. Turning now to the deposits, the comparison for the two years is as under: —

Sept.. 1910. Sept.. 1911. £ £ Government deposits 1,650.619 3,121,365 Free deposits ... 12,749,702 13.438,405 Fixed deposits ... 10.394,647 10,516,116 Totals £24,994,958 £27,076,884 There is a substantial increase in the total due to the unusual expansion in tho Government deposits. Taking a period of five years the Government deposits compare as follows: — September. '.'- £ , V, 1907 ... .» 1,952.291 r-',""•':( 1903 ... ... ... ... 1.066.097 1909 ... ... ... ..; 1,428.034 , v ' 1910 ... 1.850,619 r'.„l?ll ... ...... ... 3,121,353

It is difficult to account for the growth of these deposits, unless it has some relalion- to the pending general election. ,* The free deposits increased by £688,703, while last' year the increase was as much as £2,219,332. In view of the great growth of bank advances the free deposits should have exhibited some corresponding growth, and that, they have not done so points to the probability that the advances have been obtained to meet outside obligations. All the bunks shared in the movement. The fixed deposits exhibit an increase of £120,469. All the banks with the exception of the Bank of Australasia shared in the increase. The fixed and free deposits combined, compared with the advances and discounts combined, are disclosed in the table appended : — Advances and Sept. 30. Deposits. discounts. £ £ 1907 ... ... 21.655.003 . 13,498.184 1908 ... ... 20.310,007 " 21,217.959 1909 20.979.120 18.170.707 1910 ... ... 23,144.349 18.177,596 1911 23,954,521 21,431,659 The excess of deposits over advances at the close of the last, quarter was £2,522.862, while a year ago it was £4,966,753. -The not© circulation shows an increase of £44,192, which is very satisfactory. There is also an increase in the metal reserve. .';■., ,_ :"-'

The figures, on the. whole, are not unsatisfactory, and the immediate outlook is very promising. A large expenditure of Government money during the next four or five months is inevitable, for, as compared with a year ago, Government deposits are £1,270,744 more. If the climatic, conditions remain favourable, and there is a large output of produce, the position will bo extremely favourable.