BANK OF NEW ZEALAND

New Zealand Times, Volume XXVIII, Issue 6089, 22 December 1906, Page 15

BANK OF NEW ZEALAND

half-yearly meeting. The half-yearly meeting of shareholders of tho Bank of New Zealand twas held yesterday morning. Mr F. de C. Malet (chairman) presided, and the other directors present were; Sir James Prendergast, Messrs Wra. Milne. AVm. Watson, Harold Beauchamp, and .Martin Kennedy. There was a small attendance of shareholders. THE CHAIRMAN’S SPEECH. The chairman (Mr F. de C. Malet), in addressing the meeting, said: “As you are probably aware our half-yearly general meetings for some years past have been more or less of a formal character. Tho bank’s balance-Aoot is made up for the year as at March 31st, and consequently no figures can bo submitted to you at this meeting. Our principal function at the meeting in December has been the election of a director by the shareholders. The director retiring on March 31st next is Mr William Watson, who is tho only candidate for the office, -and, being eligible for re-election, has given the statutory notice of his candidature. I have pleasure, therefore, in declaring Mr Watson duly elected. Although it is not customary to submit a balancesheet at this meeting, or to deal with the figures in any way, shareholders will be pleased to know that I am able to continue to report that the business of tho hank shows a very satisfactory increase under all heads. You will also be gratified to' learn that tho profits for tho half-year ending September last are greater than those for the corresponding period last year. It is my pleasing duty to-day to be able to announce to you that an important epoch in the history of the bank was reached on tho 17th inst., when pursuant to an Order in Council made by his Excellency tho Governor on the 7th instant, Hhe Assets Realisation Board was dissolved as from Monday last. The amount of debentures issued by the Assets Realisation Board outstanding on that date was £438,000. These have since been cancelled, and tho remaining assets of the Board pass Jo and vest -n the bank in terras of the provisions of section 23 of the Bank of New Zealand Act, 1903. You were informed at the annual meeting in June last that the directors of tho bank had given considerable thought and consideration to the affairs of .the Assets Realisation Board, being desirous of removing every obstacle in the way of payment to shareholders of some better return, by way of a larger dividend, than has hitherto been possible, and of building up a strong reserve fund. With the view of facilitating matters in connection with the .contemplated early dissolution of the Assets Realisation Board tho directors of the bank took advantage of clause 27 of the Bank of New Zealand Act, 1903, and .requested the Assets Realisation Board to transfer to the hank all mortgages, contracts and other securities held by that Board as security for unpaid balances of purchase money of assets sold by them, in exchange for debentures of the Assets Board for a corresponding sum. The amount of these mortgages and other contracts at 31st July last was £371,410 14s. This sum, together with accrued interest (£5061 14s Id) was paid over to the Assets Realisation Board on that date, and debentures of the Board to the amount of £372,000 were thereupon redeemed, thus reducing the outstanding debentures from £853,000 as at March 31st, 1906, to £483.000. It may be of interest to state here that when the Assets Board was set up in the year 1893 the value of the debentures issued by the Board was £2,680.285. Following upon this the Board of Directors requested the chief auditor of the hank, in terms of clause 32 of the Bank' of New Zealand Act, 1903, to cause tho properties vested in the Assets Board to bo valued. The chief auditor immediately took action, and secured competent and tollable -miners to value the whole of the landed properties, live and dead stock, etc., vested in the Assets Realisation Board'as at July 31st lost. The report by the chief auditqr of tlxeValuation obtained by him at the instance of the Board of Directors was handed in to the general manager of the bank on September 20th last at d was immediately forwarded to the Valuer-General .for. his confirmation as provided for in the set already referred to. On October 24th the Valuer-Gen-eral’s certificate in respect of the properties vested in the Assets Realisation Board as at July 31st was received. On the basis of tho Valuer-General’s certificate the total assets as at July 31st amounted to £510,083. The liabilities of the Assets Realisation Board at the same time amounted to £489,661, showing a surplus of £20,424. The Valuer-General’s certificate was at once forwarded to tho Premier yyith the request that, as the assets were more than sufficient to meet the outstanding liabilities of the Assets Realisation Board at tho date of the valuation, he would be good enough to obtain tbo Order in Council dissolving the Assets Board in terms of section 93 of tho Bank of New Zealand Act. 1903. This authority was given on the 7th instant, as already stated, and from the 17th instant the Assets Board ceased to exist. Apart from its effect upon the future prospects of the bank from the shareholders’ point of view, the extinguishment of tho Assets Board also covers the discharge of the contingent liability of £2.680,285, incurred by the country in 1895 wheVi that Board was first constituted. I take this opportunity to congratulate the shareholders of the bank and the country on tho satisfactory completion of this transaction. The properties taken over from the Assets Board will be administered by the hank with a view to their early realisation.

“ Dividend.—The restrictions imposed by Statute with regard to the appropriation of the profits of the Bank having now been removed by the dissolution of the Assets Realisation Board, tho directors are satisfied that tho profits of the bank for the halfyear ended 30th September last justify them in declaring an interim dividend of 5 per cent., and the board of directors have accordingly passed a resolution to pay such dividend. The dividend will be payable dn and after the 14th pros. to ordinary shareholders whoso names appear on the register at this date. According to tho priority subsistlngjn respect of the preference shares issued to the Crown in terms of tho Bank of New Zealand Act, 1903, an. interim dividend of 5 per cent, is payable on these shares also. Should a further 5 per cent, be paid to ordinary shareholders in respect of the profits for the’ year ending 31st March nest, tomake 10 poi-oent. for the year, the payment for that period to the pre'foresee shareholders will he 3J in jiddition to the 5 per cent, now paid, making tho dividend 7i per cent, on the preference shares for the year as provided by paragraph B of section 10 of

the Bank of New Zealand Act already referred to.

“ General Manager.—ln terms of the conditions under which he took office. Mr Michio retires from the active service of the bank at 31st March next, and in view of his retirement the board have considered the question of the appointment of his successor, and I have pleasure in announcing to you that Mr William Callender has been appointed general manager of the bank. The appointment takes effect as from 31st March next. Mr. Callender possesses an intimate knowledge of the bank’s business gained during a service of 215 years. He has acted as inspector, branch manager, and has also had a long experience of the working of the head office, while for the iast three years ho has held, under appointment of the Government, the office of chief auditor of the bank. Mr. Callender is well known to the staff personally, and to many of the customers of the bank, and the directors have every confidence that under his management tho business of the bank will bo efficiently and safely conducted. It does not como within my province to make any announcement with regard to the appointment of ohiof auditor, that being a matter which is entirely in tho hands of the Government of the day. It has become public property, however, that tho appointment has been offered to and accepted by Mr. B. M.' Litchfield, manager of the Christchurch branch, one of our oldest and most trusted officers.

“I havo nothing more to say, but I will just take this opportunity of welcoming back our colleague, Mr Beauchamp, who has been on a visit to the Old Country. Though he has been away, ho has been at work in the Old Country, attending to the affairs of the Bank of New Zealand;' and 1 am suro it is a very good and wholesome thing to have tho directors to occasionally transfer themselves to the other end of the globe, and gain experience there in many ways of which wo get the advantage on their return. (Applause.) Mr Beauchamp: I must say, Mr Chairman and gentlemen, that I am very pleased to be back with my colleagues in Wellington. MR WATSON. Mir Watson; I thank the shareholders for having re-olected mo as director. This week is a remarkable one in the progress of the bank. On Monday tho cessation of the Assets Realisation Board proclaimed to the world that tho hank was free of the deficiency that so long held it .trammelled; and to-day the first fruits are shown in the announcement of an ad interim dividend. It is in the first place an occasion for rejoicing and general congratulation to tho Government, because their action in coming to tho assistance of the bank is now proved to he abundantly justified—to the ordinary shareholders, because their patience has .been rewarded, and to the directors and staff, both here and in London, because their labours have been crowned with success. In exulting at the dissolution of the Assets Realisation Board, I should say that tho Assets Realisation Board, served the purpose for which it was established, and served it well, and that is tho host that can bo said of any institution. I think that our thanks are due to the members of the - lato Board, their general manager and their staff. The assets of the bank are now all clear and good; its popularity is undoubted; its business is constantly increasing; and its future is as promising as that of any, lank in the world; (Applause.) Mr J. W. Richardson congratulated Mr Watson on his re-election as shareholdeis’ representative on the board of directors. ’Looking back ten years ago, and viewing the state of affairs to-day, he thought they could not avoid congratulating Mr Watson on being present. (Applause.) MR KENNEDY. -

Mr Kennedy agreed with Mr "Watson that it was a day on which the shareholders should congratulate themselves on the financial position of the bank, and the recovery that had taken place. It was, he might say, unprecedented. and wholly unlocked for a few years ago; and even those amongst them who had taken a sanguine view of the prospective recovery of the bank, bould scarcely realise that' they would be in such a prosperous position as today. Speaking for himself, he might remind them that when he used lorefor to the recovery. the bank was. making, and anticipated that the deficiency would probably he paid off in IfiOfi ho was not sufficiently sanguine that it would bo possible to pay the increased dividend in this year. He thought they would have to wait until next year to earn that dividend. However, the success had been so .great that the bank had been enabled to pay this dividend a year before he had expected. He also joined with Mr Watson in expressing the belief that the Assets Board had done well for the bank. They had no intimate knowledge of the working of the Assets Realisation Board, but he thought he was justified in saying that the hoard and,the bank were justified in the work that had been done. If there had been any dissatisfaction it had been in the delay in the realisation of those assets; but he thought the- Assets Board had justified that delay. If they had rushed those estates on the market, the gap to be filled would have been greater. As they all know the' value of landed estates had increased to a largo extent in the colony, and through the Assets Board the bank had reaped the advantage of that in larger prices. Therefore, he thought, their thanks were due to the Assets Board for tho manner in which they' had handled the estates handed over to them. The shareholders of the hank had every reason to be satisfied, not only for the successes attending these last 1 few years, but also for the general outlook and prospects of the bank. The credit, of course—as had so often been spoken of at that hoard—was due in tho first instance to the Government in having undertaken the resuscitation of the hank. It was regrettable that so many shareholders went under, who were unable to pay their calls —it was regrettable that they were not now reaping the advantages of recoveryhut this was not attributable in any way to any fault of the Government. the time tht Government had had to do a stern duty, and that was to insist upon the calls being met, when in addition to that tho Government had come forward and pledged the credit of the colony to the extent of nearly £5,000,000, and when many opponents of their policy thought the - money would bo' lost. He thought credit was duo to the Government of the day for its -.action" in tho'matter. They could hotl, of course, do:anything .to "relieve the loss of shareholders whom circumstances had obliged to lose their shares' at . that' time,' but there were still a good many struggling shareholders in ■ the bank who had done their utmost to hold their shares, and it was satisfactory to think that they were njnv

sharing and would share in the recovery of the bank. (Applause.) Mr Beauchamp desired to say thSt while rejoicing in the dissolution of the Assets Board, it rendered it possible for tile directors to pay a higher dividend. Ho sincerely- trusted that tho shareholders would be satisfied with tho payment of a moderate dividend, and that the bank out of the profits accrued would ho able to establish such a reserve fund as would make it one of the strongest in Australasia. If they could only have a few years of success there would bo no difficulty- in doing so, but ho maintained that it should he the endeavour of tho shareholders to establish a strong reserve fund before praying a higher dividend than 10 per cent, per annum. They had been singularly- successful in tho past in tho prosperity of the colony, htit could not of course always hope for fat years and such good times. They thought that tho profits accruing in the next (to cade would go far to wipo out the £1,000,000 debentures which would materialise in about ten years’ time. (Applause.) Mr T. S. Weston proposed a hearty vote of thanks to the chairman, directors, general ' manager, and staff. In reference to Mr Michio relinquishing the post of general manager, he desired to sty how much the shareholders appreciated his services as general manager. Tho -good record put up by Mr Michio must he an example to those who in future might occupy his position. In the new general manager the hoard had selected a gentleman who had an intimate knowledge of the affairs of the bank and the trade and commerce of tho colony. The next step for tho hank to take was to clear the £1,000,000 guaranteed stock, which fell due in 1914. With the cordial cooperation of every member of tho staff, there should be no difficulty in meeting tuat out of tho reserve fund which would have accumulated. (Applause.)

Mr J. B. Harcourt seconded 1 l>e motion, which was carried unanimously jure chairman, in acknowledging the vote of, thanks, said it was always satisfactory—in a work of this nature and of such magnitude—to know that the directors had the shareholders with them. He thought he might say with truth that the directors had spared no pains to bring about this' satisfactory state of affairs. They worked well together, loyally and heartily, and personally ho had never met better colleagues in his life. As regarded the future he was sure that no pains would ho spared to bring about that which the shareholders desired to see—the bank once more a free institution, as far as tho Government was concerned. (Applause.) Mr. Michie also thanked the meeting on behalf of the staff.