COLONIAL BANK.

New Zealand Mail, Issue 1204, 29 March 1895, Page 13

COLONIAL BANK.

" By Telegraph. — Press Association. Dunedin, March 27. . .'v. The half-yearly meeting of the proprietors of the Colonial Bank of New Zealand was held at the banking-house, Princes street, this afternoon. The directors, in their half-yearly report for the period ending 28th February, stated y that the net profits, after deducting interest paid and accrued, and all other amounted to .£13,664 7s Id, which, with £8227 lis 9d brought forward, gave £21,891 18s lOd. From this had to be deducted £ll9l 3s 4d land, income and note tax, leaving available £20,700 15s 6d. The directors recommended this to be applied as follows : —Payment of a dividend at the rate of 6 per cent, per annum, £12,000; balance to be carried forward, £B7OO 15s 6d. : The Hon Geo. McLean, in moving the adoption of the report and balance-sheet, said—l shall exercise my privilege, in moving their adoption, of briefly comparing some of the principal items with those of the previous half-year. The note circulation differs only by some £400; bills . payable and other liabilities are less by £78,000.. The deposits have increased by ' £136,000; coin and bullion by £86,000; and -remittances in course of transit by £109,000; while the advances have decreased by £1161,000. These figures ought to satisfy the most exacting as to the strong position of the BanK, both in the Colony and in London. Stagnation of trade generally, in consequence of which customers require 'less accommodation than formerly from financial ' institutions, is the cause of the reduction in our advances to which I have referred; for we have called up ho sound advances On the contrary, we are neglecting no oppor- -&. tunity of securing desirable business. /Although the business of this Bank applies solely to this Colony, yet as your directors ' could not without anxiety view the probable outcome of financial matters throughout :*'; the world, they decided for the present to maintain the Bank in an exceptionally v strong position. It will not be forgotten ■ that in carrying out this determination the large amounts of coin and bullion held in our treasuries here earn nothing, while in London our floating money earns at the present time but a comparative trifle.

Still, as the maintenance of an extra strong position is in the directors' opinion paramount, they are determined until financial matters assume a more settled aspect to continue the policy indicated, even at the risk of having if necessary, to pay a further reduced dividend. Memory will hardly carry us back to a time when our principal products were lower in price than now. All the same we must take heart. Bad times hitherto have not been unknown to us. The Colony went through them, and was able to reap the benefit oE the wave of prosperity that followed ; and so no doubt it will again. Encouraging news comes to us of an improved demand and a hardening of prices for wool* The markets for wheat and kauri gum also appear improving, while an opening seems likely for our timber in the Home market. The frozen mutton, butter, and cheese trades are not as good'as we should like to see them, but doubtless our energetic colonists will find some means to overcome th« momentary difficulty. We may possibly not be able to command the high prices hitherto obtained, but if a regular market and fairly payable prices are found it will speedily put an entirely different aspect on the trade of the Colony. Indeed., it is not out of the range of possibilities that we may reap some benefit on the termination of the war between China and Japan, as new markets in those countries may eventually be opened for our products. "With increased confidence and a revival of trade comes an increased demand for money and better rates for advances. For when people are prosperous they are able to pay a fair rate for financial accommodation. With the

reserves which every bank has to hold, and of which, as I have explained before, an. exceptionally large amount is held by us, it is more than ever necessary for the sake of profit that a fair margin between the lending and borrowing rates for money be obtained. Consequently, it is evident that as the advance rate comes down, so the rate which we pay our depositors has also to be reduced. The lowering of these latter rates was, however, not decided upon until after careful consideration had been given to the subject, as the reduction must necessarily affect a large number of thrifty people who .supplement their incomes from interest on small deposits placed with us, and to whom a curtailment of 1 Der cent, on their investments is a matter of some importance. The Chairman, in reply to Mr Stewart, said the shares of the Bank had not fallen as much as other shares had. He thought it was. almost unnecessary to answer any question about a call, because they could not employ the money they had at the present time, and if they got money by way of a call, what would they do with it ? As far .as human foresight could see, he saw no chance of a call, and he never dreamt that anyone who saw the balance-sheet would ever think of such a thing. The report was adopted, and Messrs W. Eose and Walter Hislop were appointed auditors. ,'■