NATIONAL BANK.

New Zealand Mail, Issue 1695, 24 August 1904, Page 30

NATIONAL BANK.

ANNUAL MEETING. (From Our Special Correspondent.) LONDON, July 8. Last Tuesday the shareholders of the National Bank of New Zealand met m a contented frame of mind at winchester House to hear their chairman, Mr Robert Lo (, an, discourse sweetly on the events of the past twelve months, which had led up to the proposed distribution of a 10 per cent, dividend and a bonus of 2 per cent. Mr Logan opened by congratulating the proprietors on the excellence of the report and balance-sheet, and on the presence in their midst of Mr James Coates, their general manager, who, after ten years' hard work in the colony, had come Home to enjoy a brief, holiday. After a brief reference to the continued prosperity of New Zealand, and to the principal item of export, Mr Logan said that in the money market in the colony there had been some stringency. Government and various local bodies hacl placed several loans on the local money market with satisfactory results. It might be expected that the bank's deposits would, therefore, have received a check to their growth, but this bad not been the result so far. Mr Coates's presence had led him to examine the progress of the bank during the past decade and the results were very striking ’Their advances bad increased,

roughly, by 80 per cent., their deposits over 120 per cent., their note circulation from £1 iU,OUU to £274,000, and their net profit from £31,000 to £68,000. Of course their charges had also increased; but, while the proportion of salaries and allowances to net profit in 1895 was 79 per cent., it was only 50 per cent, last year. Turning to the balance-sheet he drew particular attention to the increase in the items of coin and bullion and of investments. The coin and bullion had increased by £124,000 since last year, and their investments by nearly £IB,OOO. It had been the constant aim of the directors to strengthen the bank's coin reserves. Nothing gave more confidence to depositors than large cash reserves, and though this must always mean' a certain loss of interest, the sense of security thus given was well worth the sacrifice. The same remarks applied to the company's investments, which were held absolutely outside the business. They were all of a high-class, and immediately realisable, and they stood at a considerably higher figure than that at which they appeared in the balance-sheet. The gross profit had increased by nearly £IO,OOO, and the net profit by £5600. Ample provision bad been made for all debts, bad and doubtful, and the directors had decided to apply £SOOO in reduction of premises and furniture. They also propose to pay a bonus of £3500 to tbe staff, and to add £2500 to the officers' pension fund. They further recommend that £30,000 should be transferred to the reserve, increasing it to £210,000. Finally, the directors proposed to pay a dividend of 10 per cent and a bonus of 2 per cent. They believed that they were justified in paying this bonus, but shareholders must understand that it was only a bonus, and the Board could make no pledge that it would be paid next year. They regarded the prospects of the bank and of the colony as very hopeful. The directors had many matters to discuss and to decide with Mr Coates during his stay in England. The question of the opening of new branches was an important one, especially as if it were carried ont it must involve an increase of the company’s capital. The shareholders might, however, rest assured that the same spirit which had carried the bank successfully through the past ten years still dominated the Board's conclusions. He concluded by moving the adoption of tlie report. Tbe meeting was afterwards addressed by Mr Coates, w'ho remarked that tlie prosperity of New Zealand must be admitted by all. The important question to be ascertained was—Would tlie reaction, be in proportion to the recent vast improvement? Ho believed that when the reaction came it would be comparatively small, and ivould not last long. The special causes of colonial commercial crises had never been a mystery. They were generally preceded by an unhealthy inflation, caused by some such events as mining booms or an extraordinary rise in the price of one or two iof thte staple products, and the pouring in -of capital from outside sources for investment. Then followed overtrading and land speculation, and ultimately came the collapse. But the flourishing state of New Zealand was owing to no artificial inflation. If money tras plentiful in the colony, and it was, it was mainly because tlie colonists nad made it by sheer industry. The prosperity of New Zealand was due to a remarkable and solid increase in production —a growth which was notable in a number of branches. From one end of the colony to the other the bank enjoyed esteem and popularity. Some reference has been made to the advisability of increasing the capital of the company. There were several points in the colony where the bank should be represented in order to maintain its prestige and popularity, and the policy of enterprise firsb of all in the direction of increased capital should, he thought, be adopted. A short discussion followed, after which the motion was carried.