BANK OF AUSTRALASIA.

New Zealand Herald, Volume LXV, Issue 19889, 7 March 1928, Page 9

BANK OF AUSTRALASIA.

. ■ ■ ■ - \ NEW SHARE CAPITAL. \ i LARGE AMOUNT PROPOSED. EXTENSIVE RECENT ISSUES. Notification has been received by" cable from the directors of the Bank of .Australasia that an extraordinary general meeting of proprietors is being convened for March 29 in London to obtain authority to issue 100,000 new £5 shares. If the necessary authority is obtained and confirmed at a meeting to be held about a fortnight later, the intention of the directors is to offer the new shares to proprietors pro rata to their present holdings at a premium of £6 per share. The recent upward trend of tSe shares on the Stock Exchange is now sufficiently explained. A Press Association message from London states that a circular has been issued to shareholders announcing the proposed issue. It explains that the additions! i capital 13 required to meet the bank's increasing business. In taking this step the Bank of Australasia is practically the last of the leading Australian banks to make a new issue of share capital within the last 18 months. The present market price of these £5 shares is slightly over £ls. The present paid-up capital of the company is £4,000,000, and the reserve fund £5,850,000. The issue now proposed will iucrease the paid-up capital from £4,000,000 to £4,500,000 and will add another £600,000 in premiums to the reserve fund. Hence present shareholders will have the option of taking up one new share for eight now held. Comment on the very extensive recent issues of shares by banks was made by Mr. G. C. Creagh, chairman of the Auckland Stock Exchange, at the annual meet- ! ing of the exchange last December. Mr. Creagh stated that the very large amount of capital raised by Australian banks during the period from September, 1926, to November, 1927, had had considerable effect on financial conditions and had helped to accentuate the stringency to which he had been referring. The total amount of capital raised by the banks was £4.243,000. In several instances shaves were issued at a premium, the total amount of premiums being £1,913,000. This meant, of course, tSo hypothecation of £6,156,000 for new bank shares whicfy would otherwise have been available for investment in existing securities. To these figures have now to be added the issue since made by the Commercial Bank' of Australia of £250,000 share capital at a premium of £250,00p, as well as this most recent issue by the j Bsnk of Australasia.