AUSTRALIAN BANK FAILS.

New Zealand Herald, Volume LXVIII, Issue 20960, 25 August 1931, Page 9

AUSTRALIAN BANK FAILS.

PRIMARY PRODUCERS. SUSPENSION OF PAYMENTS. STATEMENT BY CHAIRMAN. By Telegraph—Press Association—Copyright (Received August 25, 12.35 a.re.) SYDNEY. August 24. The Primary Producers' P>ank of AusIralia, Limited, with headquarters iri Sydney and branches in the other States, has suspended payment as from to-day. The shareholders are to la., recommended to place the bank in voluntary liquidation. The chairman of directors, Mr. H. Schwieger, announced to-night that if the bank's securities realised anything like the bank's valuation, all depositors should ultimately receive 20s in the pound. The bank, which was established in 1923, encountered unprecedented difficulties, accentuated bv the pronounced fall in value of wheat and other primary produce, the marked reduction in security values, such as of country lands, the necessity for maintaining advances to farmers, couplet! with steadily declining deposits. lack of adequate capita!, and inability to obtain temporary accommodation, or to amalgamate with any other financial institution.

While most- of the bank's clients were unable to reduce their indebtedness in the slightest degree, there was no alternative, added Mr. Schwieger, but to close the bank's doors.

The bank's paid-up capital is £409.40 L The deposits at the last balance-sheet in February amounted to £1,483,845. '1 lie assets totalled £2,102,443, of which bills discounted, loans and advances accounted for £1.592,313.

The bank he'd £375,085 in iiquid assets, including £3/,890 in cash, £92,000 at short call, and £145..678 in Commonwealth bonds.

The declared net profits of the bank in recent vears have been £5204 in 192?, £5657 ixi 1928. £7075 in 1929, £2328 in 1950 and £990 in 1951. Nearly the whole of the paid-up capital is in preference shares, £459.580, and only £22 in ordinary shares. The preference shares are entitled to receive a cumulative dividend of 7 per cent. The bank has never paid any dividends.