THE TRADING BANKS

New Zealand Herald, Volume LXXII, Issue 22225, 27 September 1935, Page 13

THE TRADING BANKS

AUGUST STATEMENT HIGH NOTE CIRCULATION INCREASE IN ADVANCES [bv TELEGRAPH —OWN correspondent] WELLINGTON. Thursday The monthly statement of assets and liabilities of the six trading banks at the close of business on Monday, August 26, was gazetted to-night. This is the thirteenth to appear since the Reserve Bank commenced business. It thus makes possible a comparison of the position over a full year's trading under Reserve Bank auspices. Notes of the trading banks to the value of £657,889 were still outstanding on August 26. This shows a decrease of rather more than £20,000, compared with the position a month earlier, on July 29. It is in marked contrast with the figure of £3,609,164 on August 27 last year, when Reserve Bank notes had been available for only one month. The active note circulation at the end of August, comprising the unreturned portion of the trading bank issue, and Reserve Bank notes in the hands of the public, totalled £6,269,530, over £170,000 more than in the July return, and approximately the same amount above the total a year earlier. The circulation is comparatively high, having been exceeded during the year only by the holiday periods at Christmas and Easter, when there was naturally an enhanced demand for cash currency. Tho position in the latest return, compared with those a month before, three months, six months and a year earlier, is shown in tho following table: —

1934. T. Banks K. Bank Total Aug. 27 .. £3,609,104 £2,487,213 £0,090,377

1935. Feb. 25 .. 921,117 5,207,842 6,189,259 May 27 . . 753,087 5,423.723 0,176,810 July 29 .. 681,639 5.411,827 6,093,460 Aug. 20 . . 057,889 5,011,011 0.269,530

Fall in Free Deposits

Free deposits or current account balances of the banks in New Zealand totalled £24,778,818, a fall of more than £400,000, compared with the level a month earlier. Thus the progressive decrease since March has been continued during August. The fixed deposits, which have inclined to rise during the same period, were higher by some £390,000 in the August return than they were at the end of July.

A comparison of free and fixed deposits, and the total of the two at the end of August and one month, three months, six months and a year earlier, is as follows: — 1934 Free Fixed Total AUK. 27 £26,184,575 £40,263,000 £60,447,581

1935. Feb. 25 27,129,357 30,011,008 03,171,020 May 27 26,374,859 35,885,504 62,260,303 July 29 25.196,141 35.990,554 61,186,095 Auk. 20 24.778,818 30,382,220 61,101,039 Tho advances and discounts at the date of the return amounted to £46,339,960, or over £500,000 more than the level a month before. The steady rise in advances, and the accompanying fall in the excess of deposits, over a period of 12 months is shown in the following table, giving comparisons of tho position a month, a quarter, six months and a year before the latest statement: — Excess of 1934 Deposits Advances Deposits Auff. 27 £60,447,581 £41,261,010 £25,180,571 1935 Feb. 25 03.171.025 41.300,732 18,870,293 May 27 62.200,363 45,381.213 10,879,150 July 29 01,180,095 45,€99.615 15,287,080 Aug. 26 01,161,038 46,339,960 14,821,078 Movement oi Overseas Assets The falling tendency shown by the value of London assets, which the banks hold in respect of New Zealand business, is continued in the August return. The figure is over £850,000 below that returned at tho end of July. Though the overseas assets held elsewhere than in London have recovered to the extent of some £200,000 from the continuous decline recorded during many previous months, the total of these assets held abroad is still some £600,000 less than it was at the end of July. The figures for the overseas assets compared at intervals of one mouth, three months, six and 12 months are as follows: —

1934 London Elsewhere Total Aug. 27 . . £11,171,987 9,255,542 £20,427,529

1935 Feb 25 . . 15.-209.78 C) 7.351,603 22,651.389 May 27 .. 18.74G.113 6,242,944 24.989,057 July 29 . . 18,034,034 5,807,953 23,841.987 Aug. 26 . . 17,173,501 6.024,546 23.198.047 The subsidiary coin held at August 26 was valued at £815,744, compared with £675,449 at July 29 and £652,210 on August 27 last year.