BANK STATEMENTS.

New Zealand Herald, Volume LXIV, Issue 19762, 8 October 1927, Page 12

BANK STATEMENTS.

RECORD IN FIXED DEPOSITS. LARCE INCREASE IN YEAR. ADVANCES STILL IN EXCESS. IMPROVEMENT SINCE JUNE. [BY TELEGRAPH. —OWN CORRESPONDENT. ] WELLINGTON, Friday An improvement in the banking position since the June quarter and a remarkable irfbrease in fixed deposits to the highest figure ever reached, are the outstanding features of the return covering the aggre gates of the average statements for the September quarter issued by the six hanks trading in New Zealand The returns reveal an excess of advances over deposits of £3,601,481, as against a similar excess a year ago of £2,341,093. When the banks raised their rates in May, they sought both to attract deposits •and check the demand for accommoda tion The results appear in a substan tial increase in fixed deposits, while the advances and discounts are barely £500,000 greatei than a year ago The actual increase in the fixed deposits is £2,323,354, but as the free deposits and Government deposits', have contracted, the total ol all deposits held by the banks is less by £2,707,459, as compared with a year ago This is shown in the table appended Sept., 192b Sept., 1927. Decrease. Govt. £4.027,503 £2,089,147 £1,938,356 Free 24,907.961 21,815,504 3,092.459 Fixed 21,074.892 23,398,246 *2.323.354 I'otals £50,010,356 £47,302,897 £2.707,459 'lncrease tn flxed deposits. Even it the Government deposits are omitted the totals of the other deposits are less than they were a yeai ago. Distribution of Deposits. The shrinkage in free deposits and the increase in fixed deposits were shared by all the banks, the movements having rcen as follows: FREE DEPOSITS. Sept.. 1926. Sept.. 1927. Doc. Bunk £ £ £ New Zealand 12.406,558 10,337,124 1.129,434 Union 2,928,461 2,352,576,230 N.S. Wales . 2,568.475 2.257.962 310,513 Australasia 2.330,834 2,079,514 251.320 National . 4,637,887 3,862,924 774.963 Commercial 975,746 925,749 49.997 Totals . £24.907.961 £21.815.504 £3.092.457 FIXED DEPOSITS. Sept.. 1926. Bept., 1927 Inc Bank £ £ £ New Zealand 10.845,289 11.736.708 891.419 Unitn . 2.386.672 2,557.432 170.760 N.S. Wales 2.724.295 3,063.019 ' 338.724 Australasia 1,741.912 1,902,840 160.928 National . . 3.007,483 3,653,820 646.337 Commercial 369.241 484.427 115.186 Totals £21,074.892 £23.398,216 £2.323.354 The aggregates of the free and the fixed deposits for the September quarter of the last five years are as follows: — September , , Quarter. Free. Fixed. Totals. 1923 £25 800.739 £18,138,096 £43.938.836 1924 ' . 25.220.639 19.901.386 45.129.025 1925 . 26,811,762 20,941,663 47,753,425 1926 24.907,961 21,074,892 45.982.853 1927 . 21.815.504 £\398.246 45,213.750 The free deposits show a heavy shrinkage on the booin year of 1925. Movement in Advances. The advances show a moderate increase oj £722,912, the amounts for the various banks being as follows: — >• \ Bank, Sept. 1926. Sept. 1927. Inc. New Zealand . 20.347,704 20,598,963 251.259 Union . . 5.722.935 5.717,632 *5,303 N S Wales . 5,940.037 6,169,244 229.207 Australasia . . 4.793.468 1,922.185 128.717 National . . 8,606,336 8,646,839 40,503 Commercial . . 1,281.971 1.360,500 78,529 Totals .. 46,692.451 47.415,363 722.912 *AII the banks show increases except the Onion Bank, which has reduced its advances by the small sum of £5303 The discounts, on the other hand, have contracted by a fairly large amount the total for the quarter was £1,399,868, as against £1,631,495, a decrease of £231,627. The aggregates of deposits and advances are compared in the following table:— Sept. . Excess of Quarter. Deposits. Advances. Deposit*. 1923 .. £43.938.836 £42.826,728 £1.112.108 1924 45,122,025 43,923.081 1,198,944 1925 . 47.753,425 44,975,360 2.778.065 Advances. 1926 .. 45.982,853 48,323.946 2,341.093 1927 45,213.750 48,815.231 3.601.481 Though the excess of advances is greater than it was a year ago, the pturns for the last five quarters show a considerable improvement. They are as follows: — Excess of Quarter. Deposits. Advances. Advances. Sept.. 1926 £45.982,853 £48,323,946 £2,341,093 Dec.. 1926 44,236,650 57,273,211 7,035,561 March, 1927 45,528.812 50,800,808 5.271.996 June, 1927 46.490.366 50,753,106 4,262.740 Sept.. 1927 45,213,750 48.815.231 3.601,481 Public Spending Power. The notT circulation amounts to £6,279,329, as against £6,485,438 a year ago, showing a decrease of £206,109, while the metal reserve, at £7,873,626, shows an increase of £81,294 on the year. The spending power of the community, as shown by the note circnlation and the free deposits in each of the last five quarters is disclosed in the following table Free Note CirQuarter. Deposits, dilation. Total. Sept.. 1926 £24,907.961 £6.485,438 £31,393.399 Dec.. 1926 23,131,103 6.757,707 29,888,810 Mar.. 1927 24.440,778 6.603.681 31,044,455 June, 1927 24.741,262 6.587.002 31.328,264 Sept., 1927 21,815.504 6.279,329, 28,094,831 A very large contraction in the spending power is obvious. FREE AND FIXED DEPOSITS. EXTRAORDINARY PROPORTIONS. Not only is the amount of fixed deposits, stated in the telegram, the highest ever recorded, but it actually exceeds the amount of free deposits— a condition that is entirely without precedent. The amount of free deposits, 1 '.2'.074.892, is the lowest since December, 1918. when the total was £20,536,863. At that period, fixed deposits were £14.466,976. Of the total private deposits shown by the September, 1926, return, 54 per cent, were free, or current account balances. The proportion of free deposits in the latest return is 46.6 per cent.