BANK OF NEW ZEALAND.

New Zealand Herald, Volume LXVI, Issue 20288, 22 June 1929, Page 17

BANK OF NEW ZEALAND.

NO CAPITAL ISSUE PROPOSED LOWkR • PROFITS IN DOMINION. RELEASE OF BAD DEBTS RESERVES [Br TELEGRAPH. —OWN CORRESPONDENT.] WELLINGTON. Friday. The annual meeting of the Bank of New Zealand was held to-day. The chairman of directors, Sir George Elliot, presided. Reviewing the balance-sheet, the chairman said the increase of £86,915 in tho capital during the year was duo to the final payment in connection with the first issuo of £703,125 of long-term mortgage shares. Loans amounting to £698,375 were current at balance date, while otliors, approximating £219,000, had sinco been made or were in course of completion. As there is statutory power to overdraw up to £500,000 from the ordinary funds of the bank in connection with this activity and to issue debentures to tho amount of three times the paid-up longterm mortgage capital, it is unlikely that a further issuo of shares will be made for some considerable timo. Funds Exceed £10,900,000. Shareholders' funds, apart from substantial inner reserves, will now comprise:—Capital, £6,858,113; reserve fund, £3,425,000; balance of profits carried forward, £617,591; total of £10,900,704. Tho chairman said tho net earnings for the year show a satisfactory increase, due to the first issue of mortgage capital being fully employed, to the higher rate obtained in London on a larger amount of liquid funds, and to the smaller provision required for bad a. :1 doubtful debts, as compared with previous years—indeed sinco 1920. The profits from business in the Dominion had fallen off considerably, owing chiefly to expansion in interestbearing deposits (many millions of which are still carrying the high rate of 5 per cent, which ruled for two-years fixed doposits from May, 1927, till July, 1928); to the reduced rate of interest on advances, and'to some reduction ia the amount of advances. Tho increase of £3,600,618 in deposits was mainly represented by in-terest-bearing deposits on which the margin of profit is narrow. ' Future Additions to Profits.

The largo sum of £212,004 was brought into the profit and loss account. Ibis amount has been set aside during recent years for certain doubtful advances which had been repaid 01* had worked into a satisfactory position, or had been liquidated with less loss than was anticipated. "We are still 'nursing' a number of doubtful accounts, but given a few more good seasons, further substantial amounts which have been provided for possible losses should also become available for allocation," the chairman remarked, adding that ample provision has been made for all bad and doubtful debts. Reference Was made by the chairman to a number of appointments to the bank's services. 110 said Sir Harold Beauchamp has been granted leave of absence to enable him to visit England. During his stay in London he will . be associated with- the London board. Ihc vacancy in the London board caused by the death of Lord Carnock, who was a member for ten years, had been filled by tho appointment of Mr. Cecil Lubbock, son oi the bank's late London chairman, who served for some years as deputy governor of the Bank of England, from which position he recently retired. Local Directors in Australia. Sir Henry Braddon has been appointed an additional local director in Sydney, in association with Mr. Alexander Jobson. Sir John Higgins was appointed local director in Melbourne last October. In expressing appreciation of the work done by the bank's staff, Sir George Elliot remarked that a contented and efficient staff is an asset of great value in these days of keen competition. A bonus on the same scale as last year had been paid to members of the staff and other employees. He also congratulated tho general manager on his elevation to tho knighthood, "in recognition of his distinguished financial services," and expressed the wishes of shareholders that he might be long spared to enjoy this well-merited honour. Sale of Freezing Works. ITie chairman's motion for the adoption of the report and balance-sheet was seconded by Mr. R. W. Gibbs. Referring to the addition to the year's profit of "provision previously made for certain doubtful advances not now required, £212,000," he said that during tho war, certain advances were made to tamers' freezing companies to enable them to intet the uncertain shipping conditions. Unfortunately, after the close of the war, legislation was passed enabling an embargo to bo placed on the disposal of this class of security and such as fell into the bank's hands were, in consequence, then considered practically valueless. There was nothing for it but to make full provision for tho prospective loss. Fortunately, during the past year, the difficulty, which gave the board considerable concern, was surmounted and the bank was able to dispose of its chief security in this connection over the works in the Wairarapa to a, reputable British company. This sale had set free a provision which bulks largely in the profit and loss item in question. * The Hon. Shailer Weston, proposing a vote of thanks to the board of directors, tho general manager and the staff, said that he would like to emphasise once again that the position of the bank's branch managers was well worthy of consideration. It was only right that managers should play the most important part in the safety of advances. Sir Henry Buckleton replied on behalf of the staff and said tho honour conferred on him by the King he regarded as one conferred upon the Bank of New Zealand and upon tho banks in New Zealand generally.

STATE'S SHARE IN BANK. DIVIDENDS AND TAXATION. [BY TELEGRAPH.—OWN CORRESPONDENT, j WELLINGTON, Friday. For tho past year the Bank of New Zealand distributed in dividends a total of JL0j4,892, of which £244.453 was paid to the Now Zealand Government, and £570,459 to ordinary shareholders. Including taxation, tho Government received £533,289 from the bank. It paid £lfc4,4!}4 in income tax, £17,633 in land tax. atid £106,729 in note tax. »In addition, local bodies were paid rates amounting <o £14,208. The hank holds £3,391,160 of 4£ per cent. New Zealand war loan stock, on which no tax is payable. Touching on tho question of taxation, in his address, the chairman of tho bank said it was to bo hoped that, in the readjustment of taxation foreshadowed by the Prime Minister, Government and municipal trading concerns will be required to pay rates and taxes on a basis similar to'those paid by other traders and financial institutions in the community. If this and Government interference with private enterprise were rectified, a long-standing grievance will he removed, the burden of taxation will be more equitably distributed, a greater confidence will be engendered, and an impetus will be given to the industrial life of the country,.