POST OFFICE BANK.

New Zealand Herald, Volume LXIV, Issue 19632, 10 May 1927, Page 13

POST OFFICE BANK.

EXCESS OF WITHDRAWALS.

VERY SLOW IMPROVEMENT. LARGE INTEREST EARNINGS. While the excess of withdrawals from post office ■ savings banks as compared with deposits has fallen during the past three years, an examination of the figures given in the Monthly Abstract of Statistics makes it apparent that the improvement iis very slow. Returns for the past 11 years showthat up to 1920-21 deposits considerably exceeded withdrawals. In that year there was an excess of £3,140,556. In 1921-22 depositors called on the bank for £1,110,234 more than they put in, and next year they followed the same policy to the extent of £1,086,836. In 1923-24 an excess of deposits of £88,651 was recorded. However, this improvement was not maintained, for since then there have been excesses of withdrawals as follows 1924-25, £830,713; 1925-26, £768,884; 1926-27, £693,256. Thus, last year the decrea.se in the excess of withdrawals was £75,628.

Although money is being drawn from the Post Office Savings Bank faster than it is being deposited, the total amount to tha credit of depositors continues to increase owing to the large sum in interest the capital earns each year. The interest payments credited to depositors during the past five years werel92l-22, £1,599,907; 1922-23, £1,605,525; 1923-24, £1,649,976 i 1924-25, £1,680,920; 1925-26, £1,731,578.

Owing to these interest earnings the decrease in the growth of the business of the savings bank is not fully apparent until the figures for the past 11 years are studied. In 1916 the total amount to the credit of depositors was £25,603,209. By the end of 1920-21 it had grown to £43,352,031, an increase of £17,748,822. In the following five years the increase was only £4,559,291, the total at the end of 1925-26 being £47,911,322. The problem of the cause of the continued excess of withdrawals from the Post Office Savings Bank is complicated by the fact that its experience in this direction is not shared by the five private savings banks in New Zealand. The Abstract shows that during the past five years the private savings banks have enjoyed excesses of deposits as follows: 1923, £565,838; 1924, £347,033; 1925, £297,137; 1926, £370,608; 1927, £370,060. The total amount to the credit of depositors at the private banks in 1926 was £6,364,383. To account for the increase in the rate of withdrawals from the Post Office Savings Bank attention is sometimes drawn to the demand for building sections and motor-cars, and the increased popularity of the time-payment system. However, as these factors ehonld affect the Post Office and the private savings banks equally, it appears that other factors are at the root of the situation.