THE OTAGO DAILY TIMES WEDNESDAY, JUNE 12, 1907. THE BANK OF NEW ZEALAND.

Otago Daily Times, Issue 13927, 12 June 1907, Page 4

THE OTAGO DAILY TIMES WEDNESDAY, JUNE 12, 1907. THE BANK OF NEW ZEALAND.

It is gratifying to bo ablo to record that t!io report and balance sheet of the Bunk of New Zealand for the past financial year show that the institution continues to enjoy the prosperity as a result of which it was finally enabled last year to throw off the incubus of t.ho .deficit that the looso management of former years, together with the occurrence of the period of depression ill tho eighties, had bequeathed to it. Tho figures contained in tho balanco sheet which was published in our issue of yesterday morning present no extraordinary features. They merely indicate that tho Bank has made solid progress during the pa.«t year. Tho variations in the amounts that appear opposito tho different items in tho balance ."heet may probably bo regarded as simply suggestive of the ordinary fluctuations of business. On tho one hand, it is to he observed that tho deposits at the 31st March last were in excess of those held by tho Bank at the corresponding dnto in IDOG by £488,88-1, and on the other hand that advances show an increase of £5)00,038 and discounts a decrease of £12-1,1-10. Thp item of " Assets Realisation Board debentures," which stood at £1,025,000 in the balance sheet of last year, has now disappeared, and in place, of it the assets of tho Hank include a total emn of £758,198 in respect of balances owing by purchasers of globo assets and in respect also of sundry assets unrealised. The interest of tho public in tho remit of the operations of tho institution is, however, it may bt» presumed, mainly a question of the profits that have been earned, and from the following comparative table, sottiim out the gross profits of the Bank for tho past five years and the net profit, after provision has been made for all statutory payments and for appropriations for the writing-down of different accounts, the steady character of the progress that has been made will be sufficiently apparent: — (!w Balance of profit. not profits. 3903 £463.120 £195.590 1904 474.652 KC0.303 19C5 509,130 253.920 1906 529.017 274.329 1907 563.688 294,880 These figures show that'the gross profits and the balance of profit and loss have alike, in the period of fivo years, increased by as much, in round numbers, as £100,000. But the net profits will be swelled in tho current period through the fact that in the past year tho Bank made the last of the annual statutory payments of £50,000 in reduction of the Assets Realisation Board debentures, and, given prudent management i and a maintenance- of the favourable

conditions of several years past, tho shareholders should bo nblo to look forward in the future to still improved results. This will, however, not necossarily mean, and—we think, most sound financiers will agree—should not menu, that their dividends will bo forthwith increased. Already they will, when the. directors' recommendations are approved, receive, a dividend of 10 per rent, upon tho reduced ordinary capital of the Bank. And with this dividend they will probably have to be content for pome years to come, even if the institution should have an uninterruptedly prosperous career in tho future. For it must he recognised that a pressing duty now rests upon the- Bank \o increase its reserves and so to fortify its position. It is proposed by tho directors- that out of tho profits of the past year a sum of £108,705 shnll be transferred to the. reserve fund, which will then be rmmded off at a quarter of a million sterling. A special necessity for the formation of a strong reserve consists in tho fact that the guaranteed debentures of £1,000,000, upon which the Bank is now paying £40,000 a year in interest, will fall due in 1914, and we assume that it will be the desiro of the shareholders t-lmt this liability shall, if it be practicable., be extinguished out of the Bank's own resources upon maturity.