THE BANK OF NEW ZEALAND

New Zealand Times, Volume LXXI, Issue 4131, 20 August 1900, Page 4

THE BANK OF NEW ZEALAND

The present position of the Bank of New Zealand must not only be gratifying to those directly concerned in. its management, but generally to colonists, who, at a serious crisis in its ■ history, became the bank’s guarantors. The review of tho bank’s affairs so ably and ..comprehensively An ade .by Mr J, R. Blair, the chairman-.’oL directors, displayed a. condition of,, affairs .• highly creditable to* thc ; 'directorate, and- one .on which he w r as *,justly entitled to congratidate the shareholders .'at‘the meeting on Friday.;last. So.-,many ~evil;prognostications .concerning.-. tho. bank’s future had'-beeir made by Those whose political animosities had somewhat • effected their' ■perspicuity''.that' soiuc were doubtless almost persuaded to believe ■that an institution; which required', the, rfsOlohy’s bid 'to thb-tune of two millions could not possibly ,be raised .to , a position of • solvency, mid',profit.... Met such is the -case,;, and;- thp. position "of the bank to-day fairly 1 warrants - the chairman in pointing’ o\ib-fco ; the shareholders ’the existence -pf :-a“ silver'.lining- to thecloud, that has .so ..long, overshadowed: I.the- institution. ■■ The-shareholders ought to . be’ ! objects' of- 'commiseration ; their position cam hardly be- a matter for envy, oven although a dividend inay be then's"'in T 902 . -, Under special Acts of Parliament there, were two calls made upon the shareholders of £3 -6s Bd each. The first call was absoibed in making provision for ascertained losses, which Included .the ’whole of the paid-up caniI tal, ' ahioiuiting,. it may be remembered, to £.lO ■ per share'-: The whole,;,of this |, capital was absolutely Tost to; the .shareholders, and it on the second call of £3 6s- Bd, which gives a capital of £419,•000—tho sole interest the shareholders possess in the ban):—that ilie chairman has ventured to confidently hope a dividend not exceeding 5 per cent, may be paid two years hence.

It is true that ilia opponents of the institution stated with the utmost assurance tiiat the shareholders would not only lose, their original capital, but could not possibly .receive.any dividend from the last call made in. respect ol .the reserve liability. ■ Jn: additions too, it was asserted that the colony would lose .through its guarantee any sum ■from one million sterling upwards. These prognostications- have-been proved by subsequent events to have been illconsid&rbd and erroneous. As a matter of fact, the colony, will not. be called upon to pay one penny piece on behalf, of the bank, and colonists will have, the. satis*, faction of knowing ' that ‘ through the Government’s coming: to - the support •of tho -hank in 1895 a' financial disaster that must have been' : appalling 'ih its ■consequenceswas averted. : -- :

Furthermore', the ■ Bank of New Zealand is fulfilling rail "its engagements, and its earning power has not. it may be opined, yet reached its limit. Critics, however, - will still .affirm that the deficiencies in connection with: the realisations will have to be ■made -good -by the bank to the' Assets Realisation Board. But the bank’s balance-sheets show that £2d0,000 has already ■ been paid to tlie Board, and year by year large sums are. being sot aside out of profits to meet whatever deficiencies may arise in this connection. It is only after meeting the statutory demands of i per cent, on the £2.000,000 guarantee and 31 per cent, on the £500.000 in- Government debentures, as well as providing £50,000 a year for deficiencies in connection with the Assets Realisation Board and taking care that every contingency is met, .that it becomes possible for. the directors to contemplate paying a dividend. All these obligations and more the bank is meeting, for the chairman noted the satisfactory fact that tho Estates Company’s assets in liquidation ' had been written, down by no less a sum than: £70.370 “ from profits to meet deficiencies resulting on realisation-” . It is, .therefore, patent that the bank’s affairs ai*e being prudently managed, and that they will continue to bo so may be confidently predicted. It is well understood in commercial circles that the bank is careful in the selection of its business, and it is safe to assume that so long as the present policy is pursued of avoiding risky transactions and the cutting of rates for the purpose of attracting business, the bank is likely to make satisfactory and profitable headway-. It has now, wo understand, got rid of the last of its trading concerns, and many ot the customers of the bank who felt that they were supporting an institu-

tion that was practically their competitor' in' business will ‘be -gratified -at- Flint announcement. The prospects of the bank, viewed from every standpoint, arc distinctly encouragin'". Its'strength and stability are now assured. Its profit-earning capacity is capable of expansion. Attempts at prognostications are usually risky, yet with prudent administration the future of the- Bank of New Zealand may be regarded by the country .with hope and confidence.