BANKING RETURNS

New Zealand Times, Volume XL, Issue 9096, 15 July 1915, Page 11

BANKING RETURNS

JUNE QUARTER FIGURES SOUND POSITION DISCLOSED. The sis banks trading in New Zealand have now issued the usual quarterly returns of their average assets and liabilities during the quarter which closed on June 30th last. A great deal aas been said recently as to the probable future of the money market here in view of the (Government raising a part of the war loan locally, and in view of this it is particularly interesting to see the extent of the funds held by the hanks in New Zealand. For ordinary times the funds now held would be abundant—private deposits have- reached the enormous total of 128,645,155. or fully three millions more than a year ago. Ajjainsh this the banks have loaned out in the form of advances and discounts ’.£23,423*575, or about halt a million less than a year ago. The difference between these two' main Items amounts to just over five millions, whereas ft year ago it was only If millions, buck a tremendous accumulation or funds give ample evidence of the splendid returns realised ironi the season's exports, assisted to a certain extent by reduced importation. . This is. of course, the time of ysar when New Zealand funds are at their highest, and in ordinary times such an accumulation of funds would mean an assured supply of comparatively cheap money. However, should the Government raise much of the ten m-llions locally it will make a decided difference to the supply available for ordinary pur poses. Tub following table gives the total as sets and liabilities of each of the banks for the quarter just closed;—

The increase in assets is entirely due to heavier metal holdings on account of more notes being used, while increased deposits and note circulation account for the growth in liabilities. Following is a short comparison of the principal items in these returns with the figures ior the March quarter, showing the moTMtents in the three months:

The main changes in the quarter are in the direction of a further accumulation of funds, viz., private deposits show .further growth, while advances and discounts have a light decline. This arises,chiefly from the realisations coming in from our season’s prod uce, though at the same time the very light scale of importation during recent months has assisted in this. Comparing the main items with earlier years, approximately three-fourths of the total assets are represented by advances and discounts, and these compare as follows for the June quarter of the last five years:—

The’ total shows a reduction on the high total of a year ago, but is still ahead of earlier years. A notable feature is the heavy decrease in discounts. These decreases, it may be assumed, are due chiefly to the reduction in importation, which has been caused by interruption in si iping. The total of these combined advances is still fairly high in spits of increased exports and decreased imports. This is evidence that as the Dominion is growing _ and our trade is expanding there is increasing need for assistance in financing this trade, and it shows that the bants are finding plenty of scope for investment for their funds normally. The growth in deposits arises probably more directly from the results of a profitable export season. The enormous growth in these deposits i§ shown in the following com* jsatkoa i—»■ • • /

The increase shown in the latest,figures is truly astounding at first sight, but in view of the splendid prices that the country’s staple products have commanded this season, it is apparent that the supply of funds must be swelled enormously by such returtis. As it is the relation of deposits to advances that governs the supply of money locally, a comparison of these two for the last six years is instructive:— ,

In. 1910 a good export season, coupled .with considerably reduced importation, brought-a plentiful supply of money and pates ruled low. .At that time money was easily obtainable at 5 percent. or even less on mortgage, but now the position is different inasmuch as there has been an appalling wastage of capital in the war, and money is so much in demand all over the world that it commands higher rates. With the Imperial Government offering 44 per cent, the New Zealand Government will probably have to give about 5 per cent., and with a standard like that set, rates for all other purposes must move proportionally. The shares of the different hanks in the deposits and advances are as follows;

Each bank shares in the growth in‘deposits and only the Bank of New Zealand and the Commercial Bank have increased their advances. Government deposits , amount to .£3 073,251, as compared with .£3,258,715 in the previous quarter, and .£3,311,411 a year ago. The only other items of general interest in these returns are the note circulation and the metal reserves, and these show the following movements in recent years:

The big increases here are due. of course, to notes being legal tender since the war started, and the increase in the one practically balances the increase in the other. Briefly the position shown by these figures is that there is a splendid supp y of funds in hand at present, but in view of the demands for capital likely to come very shortly firm rates must be expected to- rule, in fact rates must rule higher in sympathy with the world values generally. '

i Assets. Liabilities. £ £ Bank of N.Z 11,663,415 18,530,483 Union Bank 5,020,844 4,175,898 bank ot JN.S. W 4,264,431 - 4 20£,t60 Bank of Australasia 3,756,441 2 8.9,417 National Bank ... ■ 4,990,311 4,816,077 Commercial Bank 205,259 173,533 Tola] 32 900, 701 34,718,073 March quarter 32,738,712 32.898,487 Juno quarter, 1911 31,994,242 30,733.097

Deposits, free Deposits, fi£"'l ,.. Deposits, Govt. ... Note circulation... one, 1915. March, 1915. 17,436,380 15,958,732 11,208,775 10,870,508 3,075,251 3,256,715 2,824,903 2,639,534 21.982.147 eoinfil/U 1,449,421 6,750.140 l’,63M18 6.420,559 Coin and bullion

June qtr. AdvancesDiscounts. • Total. £ £ ' £ 1913 ... 21,982,147 1,441,429 23,423,576 1914 ... 22,139,666 1,793,189 23.938,855 1913 ... 20,627,310 1,951.369 22,578,679 1912 ... 21,154,836 1,840,003 22,994,839 1911 ... 18,784,391 1,831.464 20,615,853

June quarter. Free. Fixed'. Total. £ £ £ 1915 17,436,380 11.208.775 28,645,155 1914 14,698,720 10,807,025 25,505,745 1913 13,919,531 10,637,962 24,557,493 1912 14,478,802 10,229,895 24,708,697 1911 13,683,160 10,559,715 24,242,875

June Excess of quarter. Deposits. Advances. Deposits. ■ ‘ £ £ <£ 191S 28,645,155 23,423,576 5,221,579 1914 25,505,745 23,938,855 1,566,890 1913 24,357,493 22,578,679 1,978,814 1912 24,708,697 22,994,889 1,713,803 1911 24,242,875 20,615,855 3,627,020 1910 23,461,196 17,935,567 5,525,629

Deposits. Advances. £ £ ’ .Bank of N.Z 13,765,521 9,984,687 iDnion Bank 3,914,080 3,997,974 Bank of N.S.W. ... 3,909.318 ■ 3,074,509 Bank of Australasia 2,584,392 2,890,323 National Bank 4,338,do 142,999 3,380,009 Commercial Bank ... 87,493

June Note Coin and Quarter. Circulation. Bullion. £ £ 1915 ... 6,750,140 1911 .. 5,500,450 1913 ... 1.714,159 -5,161,305 1912 ... 1,773.914 5,251,995 1911 ... 1,717,007 5,103,o64