TRADING BANKS

New Zealand Herald, Volume LXXVI, Issue 23280, 24 February 1939, Page 11

TRADING BANKS

'JANUARY RETURNS HIGHER LONDON FUNDS TOTAL OF £4,171,000 HELD FREE DEPOSITS UP £2,000,000 [BY TELEGRAPH —OWN CORRESPONDENT] WELLINGTON, Thursday Tho monthly statements of assets and liabilities of the six trading banks at tho close of business on Monday, January 30, were gazetted to-night. A comparison of the principal items, with tho figures in tho return of December 26, is as follows:

January December Circulation .. £10,075,132 £13.063,060 Free deposits .. 80,175,876 34.171,765 Fixed deposits .. 29,034,326 29,798,007 Advances .. 56,187,036 57,797,407 London assets .. 4,170,661 2,785,235

Advances, which showed a downward tendency in the December return, have fallen n further £1,610,371 in the month the present statement covers. The movement is normal for the period of tho year. Tho trading banks have had more success in building up sterling resources than tho lleserve Bank has, the London assets held in respect of New Zealand business having increased from £2,785,235 at the end of December to £4,170,664 in tho present return. Free deposits have risen by almost exactly £2,000,000 in the period of tho statement, while fixed deposits, which have tended generally to fall in recent times, are now £136,319 higher. Notes in Circulation Notes of the licserve Bank hold as till money at January 30 were valued at £4,390,726, compared with £3,571.665 a month before. The issue at the end of January was £15,365,858, making the active circulation £10,975,132. The issue and circulation in the January returns for the past three years have been as follows: — Jan. Issue Circulation 3937 .. £13,008,392 £8,355,153 1938 .. 14,240,044 9,660,812 3939 .. 15,365,858 10,975,132

Free deposits, or current account balances, show very little variation from the level recorded a year previoxisly, being some £IO,OOO lower. The totals in both instances are substantially higher than in the January returns of the preceding three years. The most marked contrast is between the total of over £36,000,000 this year and last, and of £25.856,500 in January, 1935. In spite of occasional gains from month to month, fised deposits maintain a downward course. In the year from January to January, there has been a decrease of £1,697,000, making the fall between 1935 and 1939 some £6,500,000. The levels of the two classes of deposits and their totals in the January returns from 1935 onward are as follows: —:

Free Fixed Total Jan. £ £ £ 1935 . 25,850,510 30,444,416 02,300,920 1936 . 28,827,015 37,033,607 65,861,522 19V7 . 35,020,901 32,919,080 67,969,981 1938 . 30,180,259 31,031,658 67,817,917 1939 . 36,175,876 29,93-1,326 66,110.202 Advances and Deposits

Tho manner in which bank lending has increased in the past two years is illustrated by a comparison of advances in the various January returns. The present year shows an increase of £2,874,000 over the figure for_the previous January, which is £5.896,000 greater than the corresponding total in 1937, these being a part of the movements which have increased advances from £44,799.000 in 1935 to £56.187,000 in the present year. The position at the end of January in the past five years is shown in the following table: —■ Excess of Deposits Advances Deposits . Jan. £ £ £ 1935 . 62,300.926 44.798,852 17.502,074 1930 . 65,861,522 45,049,334 20.212,188 1937 . 67,9(59,981 47.416.619 20,553,332 1938 . 67,817.917 53,313,050 14,504,867 1939 . 60,110,202 50,187,030 9,923,106 Fluctuations in the value of assets held abroad, in Ixmdon and elsewhere, on account of New Zealand business, as shown in the January returns since 1935, have been as follows: —"

London Elsewhere Total Jan. £ £ £ 1035 . 12,234,355 7,807,234 20,131,580 1036 . 11,140,870 6,183,102 17,333,071 1037 . 7,361.885 5,221,770 12,583,655 1938 . 5,739,073 3,439,731 9,178,804 1030 . 4,170,664 1,791,070 5,064,734 Subsidiary coin in the banks at January >3O was valued at £819,469, compared with £644,871 in the December return. The banks also held gold valued at £337 at tlio end of January.