BANKING IN DOMINION

New Zealand Herald, Volume LXXI, Issue 21885, 22 August 1934, Page 7

BANKING IN DOMINION

LEAN TIME BEING FACED LONDON CHAIRMAN'S VIEW MORE HOPEFUL PROSPECTS [from our own correspondent] LONDON, July 20 "In spite of tho chaos created by world conditions, Now Zealand has striven manfully to meet her difficulties, although it cannot be expected that there will be any return to complete normality until some of the world problems of the price levels and trade restrictions aro solved," said Sir Austin Harris, who presided at tho annual meeting of the National Bank of New Zealand, Limited. "The immediate prospects of banking are none too favourable," ho said. "Wo are going through a lean timo in Now Zealand, and bankers there aro facing the same troubles that they have experienced in London—tho great difficulty of tho employment of f,hcir superabundant funds, but, so far as wo aro directly concerned, without tho opportunities for profitable investment in short-term securities. I am confident that New Zealand conditions will quickly respond to any favourable turn in world affairs."

Changes in the bank's balance-sheet wero- explained by tho chairman. The first new feature was the transfer of £1,000,000 from the reserve fund to a currency reserve. In doing this they had fallen into lino with tho other Dominion banks, and had thus provided for the depreciation in Now Zealand and Australian assets caused by the high rato of exchange. The National Bank was a British company, and it was necessary that tho balance-sheet should bo presented in pounds sterling. But any ultimate loss in this respect would, of course, only be realised in tho event of their having to transfer their assets to London. The second change was in respect of tho exchange and contingency account. Last year, they dealt with the £40,000 required in the final allocations, but this year they had deducted it from net profits, because they felt that this amount should be a charge against profits, as it represented the amount required for exchange depreciation on increased New Zealand assets, including profits for the year. Sir James Grose, general manager of the bank, was present, and spoke upon the effects of the high rate of oxchange, which, he said, had been forced upon the Government largely by the depreciation of tho Australian currency, and also because the Government felt it necessary to give a bonus to tho man on the land.- Confidence was beginning to reappear, he said, and although lean times were not yet past, a gradual if slow improvement might be expected. It was announced that Sir Thomas Wilford had been elected to the board.