BANK OF N.S.W

New Zealand Times, Volume XLI, Issue 9539, 22 December 1916, Page 3

BANK OF N.S.W

VERY ACTIVE BUSINESS CONSERVATION OF RESOURCES. The half-yearly meeting of tho proprietors of tho Bank of New South Wales was held at Sydney on November 28th, Sir C. K. Mackellar, chairman of directors, presiding. Tho bal-ance-sheet showed a profit for tho half-year ended September 30th of £248,443. A dividend at tho rate of 10 per cent, was recommended, together with the carrying of £50,000 to reserve, leaving £105,241 to be carried forward, as against £88,949 brought into the accounts.

Sir C. K. Maokellar said, in moving the adoption of the report and bal-ance-sheet :

Following the usual practice at our half-yearly meetings, I will supplement tho report and balance-sheet by offering some remarks on the figures, which will place before you more fully tho position of the bank. The usual comparison in tho past has been from twelve months to twelve months, but it will also be instructive to touch on tlio comparative figures since September. 1914, when the war began. Taking tho liability side first, tho notes in circulation have increased £86,000 sinco September, 1915, caused by an expansion of our New Zealand issue. I have explained several times before that the notes of tho trading banks in New Zealand under various legislative enactments represent the principal cash currency of tho Dominion, and as trade has been brisk there the circulation has naturally responded. Our own tot*l issue there is only about £400,000, which is hut a small factor in our business as a whole. Deposits are about £1,370,000 less than at September last year, which is a good deal owing to ■Government operations, these having been very active. On the other hand, they are about £2.000,000 higher than at September, 1914, when tho war began. 1 The decrease in fixed deposits has been about £300,000 since September, 1914, which is a small proportion of tho whole. Wo have kept the rates for these as steady as possible, believing that to bo the best policy at this juncture. While wo are quite ready'to accept deposit money from our clients, it is not in our judgment desirable to adopt any competitive attitude in this respect. The item of £1,076,000 at credit of wheat scheme specially referred to at last March review has been reduced to £453,000, and will disappear as the wheat is shipped. . Bills payable and other liabilities have decreased £2,100,000, which is caused by tho absorption by the Commonwealth Bank of their War Doan accumulations. 1 have pointed out tho incidence of these special balances on previous occasions. The fluctuations have been always fully allowed for in our estimates from tifno to time. Tho hills payable themselves show no material change, our business in this respect being very steady. On the assets side the changes harmonise with those of”tho other Tho first lino has come down from £30,040,dOO to £24,907,000 on the year—a decrease of £5,133,000, due to decreased deposits and balances duo to other hanks, arid also to an increase in the advances referred to later on—hut wo still hold the ample proportion of over 50 per cent, of our liabilities to tho public. Onr actual cash holdings are somewhat less proportionately than of late. Tho difference has gone into Government securities, of which we hold £0,396,000. The general advances of the bank show some £1,900,000 increase on the year. The requirements of our trading clients have been heavy, principally owing to dislocation of business through war disturbance of supply and shipping. There has also been some outgo for stocking up by graziers after the recent drought and other necessary productive operations. Much of this money will come hack to us as wool and meat are realised, and there ar© also good prospects for the coming harvest, which will also tend In the same direction. As to advances generally, wo are not seeking to do more than meet the actual legitimate requirements of our clients, and productive. Though these are fairly heavy tor tho time being, tho general trend of our policy may bo gathered from tho fact that, whereas our deposits, other liabilities,' and capital and reserve have increased £3,800,000 since the war began, our advances have increased only £400,000, excluding the wheat accounts on both, sides as purely temporary. The difference has been kept in first line assets. The new capital has come in well, and the number of shares not taken up or indivisible is small. The Dondon portion is held in suspense on account of shareholders there. The Board of Trade placed a war embargo on all new issues of capital in the United Kingdom till the war is over. Profit and loss accounts show that tho profits have been well maintained. Wo are recommending—in addition to tho usual dividend, with the adjustments for the new shares tlie same appropriation as last year, of £50,000 for the-reserve fund, and also a somewhat larger carry-forward than "was brought forward. Shareholders may accept my assurance that all contingencies are fully taken into consideration. . , , , Tho analysis which X have so far will prove to you that, speaking generally, the bank’s business has been very active. You will readily realise that the war has brought about many conditions which were new to us, and, therefore, abnormal. But so fan as the bank is concerned, we have been' able to successfully adapt our business to the changing circumstances as they have arisen. Fortunately the war conditions have been accompanied, so far as Australasia is concerned, by prosperous seasons during the past year. Thor© is scarcely any portion nf this country that has not had a good time so far as the primary products have been concerned, and New Zealand has also equally participated. Wo cannot say how long the war is going to last, and, furthermore, when it is over we must expect many adjustments of prices, as the result of channels of trade, now closed, being again available, thereby bringing our products into competition with the world’s markets, and particular care should be exercised with regard to land values in the country, which are too often based on the day-to-day prices of the products earned from tho land. This is the attitude we ourselves are taking up in onr business, and it is one which applies to the whole community. Summed up in a few words, it means a steady conservation of all our resources pending the developments the future may have in

storo in' respect of tho financial situation from time to time.

A word or two about tlio staff will conclude what I have to say. You will notice that wo have appended to the report some particulars of our staff in relation to tho war. Five hundred and sixty of our men have enlisted, and when all those who have applied for leave can bo spared, which will bo done as soon as possible, the numIkt will reach GOO, about one-third of the whole staff. Wo regret the fatal casualties which have occurred —numbering thirty-seven. In order to moot to some extent the abnormal conditions now prevailing the board have granted—as a wartime measure—certain allowances to that portion of tho staff which most feels the strain. This involves an expenditure of some £22,000 a year. The motion for the adoption of tho report and balance-sheet was adopted. Sir C. Iv- Mhckellar was re-elected a director Auditors elected were Messrs A. G. Milson (re-elected) and W. H. Palmer.