BANKING RETURNS

Otago Daily Times, Issue 15970, 13 January 1914, Page 6

BANKING RETURNS

FIGURES FOR THE QUARTER.

(Fiiom Ouu Special Couiiesfondknt.)

WELLINGTON, January 12.

Tlio banking nsl units of tho six banks operating in New Zealand for the December quarter reflect the edicts of tho recent strike of watereide workers. Compared with the corresponding quarter of 1912 the note circulation io lc:*s by £40,743. The free deposits on current account balances show a shrinkage) af £174,173. 'J'liu overdrafts have expanded by £430,697, and tho disco unto by £64,095. These movements indicate that trade was Ices active than a few yours ago, and that traders and others have had to ecck bank accommodation to a greater extent. Tho movements in the ■ aggregate assets -and liabilities arc shown in the table appended: — Deo., 1012. Dec, 101.1. Assets *:i1,1i!>2,277 £31,812,377 Liabilities 26,128,401 2(i,778,:i!)5 Excess Of assets £5,503,876 £5,0,13,1182 There is a ehrnkagc of about £530,000 in tho margin of differenoe between the assets and liabilities. The advances or overdrafts exhibit an increase of £400,697, and the movements as they affect tho several banks are disclosed in the table bolow: — Bank. Dec.,1012. Dec, 1913. Inerense New Zoalmd £8,570,265 £8,071,001 £31)2,636 Union ... ". 3 676 802 3,731,686 54,884 Now South Wa'cs 3,015,387 2,03:1,847 *;i1,540 Au«t™ iieia ... 3077,232 2,061,208 *11G,024 N-nMoniil . 3,045,440 3,155,330 100,881 Commercial " ... 1,914 20,860 Totsils .-e21,396,0-(0 £21,826,746 £430,697 '"* indicate; a decrease. The Bank of Now South Wales and the IBank of Australasia exhibit shrinkages, and the decrease shown by tho latter is relatively large. Tho discounts have expanded by £04.095, and the aggregate exceeds the £2.000,000 mark for tho first time since 1908, when the effects of the financial crisis in tho United States were being felt in the dominion. Tho movements in the discounts are given as under: — Bunk. Deo., 1012. Dec, 1013. Increase New Zealand ... £1,031,467 .-£1,071,084 39,617 Union ... 208,567 108,110 *10,157 Nf\v skiufch Wales 163,010 205,635 41,710 Australasia 245,874 237,138 "8,736 National 300,670 300,822 152 Commercial — 1.500 1,500 Totals £1,950,494 £2,014,589 £G4,005 * Indicates a decrease. The Bank of New South Wales has made the largest relative gain. The aggregates of the advances and discounts for the December quarter of each of tho past five years make an interesting comparison, and the figures arc as under:— December quarter. Advances. Discounts. Totals. 1909 £16,044,098 £1,835,471 £18,770,560 1910 17,850,015 1,802,773 10,653,388 1911 21,388,640 1,802,354 .23,101,003 1912 21,306,040 1,9M,4!M 23,3-!C,54:t 1913 21,826,7-16 2,014,589 23,841,335 In four years there has been an increase of £4,882,648 in the advances, and £179,118 in the discounts, or a total of £5,061,766, which will serve to illustrate tho fact that the banks have been lendiug freely. The demands, however, have been exceptional, and oven with slightly higher rates of interest there is a keen demand for accommodation. Coming to the deposits, the ihrec classes exhibit the following movements:— Dec, 1912. Dec., 1013. Increase Government deposits £1,342,976 .-€2,086,004 £733,088 Free deposits ... 12,468,048 12,203,875 *174,173 Fixed deposits ... 10,433,732 10,045,345 106,613 Totals £24,240,756 £24,025,284 £675,528 ♦ Indicates a decrease. There is a substantial increase in tho Government deposits, but the free deposits are less than a year ago, and yet with the increase in advances the deposits should also have expanded . T,he movements in the free deposits ae they affect the several institutions, are shown in the table appended: Bank. Dec, 1912. Dec, 1913. Increase New Zealand ' ... £5,823,064 £5,780,341 *.03,72: i Union 1,655,124 1,682,112 26.958 New South Wales 1,581,940 1,541,883 •40,066 Australasia 1,340,801 1,298,284 •51,617 National' 2,049,776 1,042,837 *106,939 Commercial 8,334 39,418 31,084 Totals £12,468,048 £12,293,875 *£174,173 • Indicates a decrease. The Union and tho Commercial Banks alone- show increases, and 'he shrinkages with the othere are small, 'lhe fixed deposits increased by £106,613, a-nd this is shown in tho table given below: — Bank. Dec, 1912. Dec, 1913. Increase New'ZeaJand ... £5,261,755 £5,340,439 £78,054 Union 1,298,339 1,317,892 19,653 New youth Wales 1,693,840 1.67U.G24 *14,216 Australasia 633,363 643,878 10,515 National 1,551,259 1,556,090 " 4,831 Commercial 146 7,422 7,276 Totals £10,438,732 £10,545,345 £106,613 * Indicates a decrease. The Bank of Australasia is the only institution to exhibit a shrinkage. The movements in the aggregates ol the free and fixed deposits for the December quarter of each of the past five years are disclosed in the table appended : — December Free Fixed quarter. deposits. deposits. Totals. 1900 ... £10,173,072 £10,588,172 £20,761,244 1910 ... 12,120,977 10,442,341 22,563,318 1911 ... 12,934,464 10,496,660 23,431,130 1912 ... 12,468,048 10,438,732 22,906,780 1013 ... 12,293,875 ,10,545,345 22,839,220 In tour years the free deposits have increased by £2,120,803, while the fixed deposits have decreased by £42,827, and on the totals there is an increase ot £2,077,976. Bankers collect the savings of one section of the community and lend this to .another section on security, und the moro fluid the security the better. I'ne fixed and free deposits " represent the savings ot the idle credits, and the advances and discounts are the means adopted by bankers for profitably employing the deposits. Taking ihe December quarter of each of the past five years we will get a comprehensive view of _ the movements under those hevds. 'Die figures are as under: — December Excess of quarter. Deposits. Advances, etc. deposits. 1009 £20,761,244 £18,779,569 £1,981,675 1910 22,563,318 19,653,388 2,909,030 ■1911 23,431,130 23,191,003 240,127 1912 ■ 22,906,780 23,346,643 *439,763 1913 22,830,220 23,841,335 *1>002.115 •Indicates excess of advances. Comparing 1913 with 1909, it will be seen that the deposits have increased by £2,077,976, while the advances and discounts together show an increase of £5,061,766. Aβ a matter of faCjt, the banks have lent to the public more than they have received, and this process cannot go on indefinitely, as some people think it should. If tho volume of tho deposits does .not increase, then the banks will be obliged to further raise their ratee to check tho demand for the limited credit available. It is a wonder that the rates have not already advanced, for the position seems to warrant it. We have now to deal with the note circulation and tho metal reserve. Under tho former head there is a contraction of £40,743, while the metal reserve has increased by £52,416 as compared with 1912. Taking a period of five years, tlie position is as under: — December quarter. Notes. Coin. 190'J £1,573,955 £5,090,845 1910 1,649,928 5,028,248 1911 : 1,698,160 5,351,953 1912 ... ... .~ 1,712,466 5,237,767 1913 1,671,723 5,290,183 The figures on tho whole are somewhat diswuraging, more especially t when we remember that the world's tra'de is on the turn, with the probability that prices of commodities will rule lower. Furthermore, have yet to pay for tho strike of watereiders. It is very probable that the community will be forced into economies, and it will do us .no harm to cut away from the extravagances of the past few years. With ordinary prudence we should get through the year with very little, if any, inconvenience.