COMPANY BALANCE SHEETS.

Otago Daily Times, Issue 19200, 17 June 1924, Page 6

COMPANY BALANCE SHEETS.

THE BANK OF NEW ZEALAND. Dividend. Ye,.r Grcss ■ 'Net Pref. Ord. ended pitoftt. profit. A. a.

♦After' deducting interest on guaranteed slock, 4 per cant, each year. As far as this dominion is concerned, the publication of the annual accounts of the Bank of New Zealand is awaited with an interest second only to that aroused by the Budget presented by the Minister of Finance. With about 50 per cent, of the banking business of the country in its hands, theposition as disclosed should afford a useful index regarding the welfare of the community. "When viewed in this light, the latest statement reflects a growing prosperity demonstrating that the- difficulties experienced in recent years, which had retarded development, are being gradually ovencome. The net profit for the year is £735,831, a figure that has only been exceeded in 1020-21. On this occasion, however, the capital employed for half of the period is larger by £1,125,000. Compared with the result of the previous 12 months, theno is an advance of .£182,193, the return being 16.73 per cent. a« against 14.18 per cent. The dividends to the respective cla-ases of shareholders remain u» before and. when reserve fund has been provided for, the floating balance is swollen by £84,556 bringing it up to £506,513. The total expenses are down by some £19,000. On an aggregate approximating a million, this may not seem appreciable and is entirely due to rtduced ratee and taxes, which in two years have come down £168,178. Expenditure in other directions is mainly tending to increase. The allowances made "uoforc the rjtoss profit has been brought cut, seem to be much en a par with prior years. "Oth<vr contingencies" makes its appearance as usual, and there is the customary provision for bad and doubtful, debts. On the opposite side credit is taken for £184,465, which is not now required under the lastnamed heading. This entry refers apparently to some specific allowance in the past, and the fact that it has been brought back to credit, while the debit continues as before, points to each year bearing its own burden in this respect.

Reserve Fund has benefited bv the addition of £500,000. A small amount £3453, is the premium on the shares which, being left after the allotment of the new ordinary issue, were aold by tender. The balance of £496,547 is transferred from profit and 4oas Account. The corresponding sum 12 months ago was £150,000. The excess this year is duo to the provision not now required for bad debts as mentioned above, and the surplus (£148,112) on realisation of certain British Government seeurties. This leaves aaura of £164,000 approximately taken fmm the actual profits for the year under review After these transfers are made the fund reaches £2,325,000. Placing the paid-up capital nlongside the total reserves, the figures are: Paid-up V—- T 3 „;*„! Tiofir,

Thus aften the paid-up capital has been increased by £1,125,000 "of which i,".>205 _ alone was issued at a pvemium, the relation of reserve to the amount paid-up has dropped only J. 25 per cent. This does not include the specific reserve for taxes which remains intact at its old figure of £426,000. The ordinary share capital is largei by one-third. The 750,000 shares, except the 2205 (fractions and unallotted), were issued at par, and ranked for dividend for the second half of tho year only. The £375,W0 issued in "B" preference shares also concenued a part of the period, and the full effect of the now issue will not be felt until the current year. Note circulation has fallen to £4,072,101. This is the lowest figure it has touched «t the closing date since 1919, but thi9 may be due merely to some temporary cause. When cornparod with coin, c*sh balances, and deposits with bankers which have also dropped considerably, tho proportion ha 3 sligntiy diminished. For the past seven years, the relation between the two is:

Deposits at £30,501,719 show steady progress. This i 3 about half si million more' than la«t year, which in turn had risen substantially oyer its predecessor. Advances on the other side after falling fon the past two years have begun to move upward and, witli an addition of Hpproximatefy one million in the 12 ; months, have mounted proportionally, as will b© seen below:

T-A-ith the aoove figures for advances, there are included securities and debts due to the bank. There is. an indication that tho abnormal seasons are over and have been replaced by those in which, if the improvement is lees remarkable, it is more solid. Bills payable when joined to the sundry liabilities come to £3,265,519. This is the lowest total tor five years. Whether this may be due to the- bills themselves, or to a smaller provision for contingencies, or to other caueea cannot bo ascertained, as the heading is sufficiently genenal to cover all miscellaneous items. Bills receivable have been mounting up of late years, and although the increase is not so pronounced for 1923-24 as for the prior 12 months, the total is now £5,695,080, or nearly nine times that of five years ago. Possibly on account of this, the British Government securities and money at call havo diminished by £581,417. Tho realisation of these securities has resulted in the disclosure of the Jiandsome sum of £148,112 from a concealed reserve, which, now brought to the light of day, goes to swell reserve fund. If this sum represents the surplus on the abovo £584,417, the valuation adopted for tho Government securities must be a stringent or.e, and it is a matter for conjecture what further reserves may lie in the British Government securities that remain as well ae in those of New Zealand and Australia. The latter of those has doubled since March, 1923, and now stands at £1,784,834. The advance in the former has not been in the same proportion, on increase of £452,457 bringing it up to over three millions and a-half. T'robably no other asset of like dimensions has varied so little of late years as this one. Much of it no doubt is employed in war loans, which as the date of redemption draws nigh should considerably appreciate. Municipal securties seem to be favoured as an investment, and during the past two years have increased more than threefold. "Coin cash balances, and deposits with bankers" constitute the eecond largest asset. The aggregate of these has dropped nearly £BOO,OOO during the year, but, aa shown above, the note circulation has followed the flame course. There ie a remarkable decrease in the notes of other banks on hand. At March 31, 1923, which was the Easter holiday period they stood at £538,527. ai> the corresponding date this year they had fallen to £29,695. The Government notes on hand had, on the contrary, risen by about one-sixth. Bills discounted stand at £1,341.191, which, if their amount at the abnormal period of three yeare ago bo excepted, is rather, under tho average. "Landed property, premises, etc." at £152,474 show a rise of £44,095. As in the case of tho preceding year no special provision is entered as hftvin? been made for depreciation. During the five earlier years a quarter of a million was written off, and the present figure appears an extremely moderate one to cover the head office and 218 branches and agencies. The rise in the total value of the assets in the 12 months exceeds one and a-half million. When the liabilities and the oneference capital are deducted the surplus approximates six and a-half millions to represent three millions in ordinary 'shares, onc'ourth of which was issued, practically all at par, durinsr tho year. Tin's highly satisfactony position speaks well for the country's general prosperity at the present time, and for its speedy recovery from the recent depression, while if there should be another fall to follow, the bank is well strengthened to meet such contingencies as may arise.

Mar. 31, £ £ p.c. ±I.U. y.y. 1918 1,106,441 336,606 10 15 15 3919 1,017,153 383,021 10 15 15 1920 1,376,838 192L 1,844,017 419,043 777,255 10 10 10 17i 13 1-3 1922 1,600,255 632,042 10 10 13 1-3 1923 1,546,041 553,1538 10 10 13 1-3 192 i 1,709,288 735,831 10 10 13 1-3

Year -Reserves. capital. iiauo. 1917-18 . .. £2,345,702 £2,279,088 102.88 p.c. 1918-19 . . 2,496,221 2,279,988 109.48 p.c 1319-20 . . 2,646,520 2,627,441 100.72 p.c. 1920-21 . . 1,886,275 3,904,98s 48.30 p.c| 1021-22 . . 2,105,818 3,904,988 53.92 p.c. 1922-23 . . 2,216,057 3,904,988 57.54 p.c. 1923-24 . . 2,831,514 5,029,988 56.29 p.c.

Year. Notes. Coin, etc. Ratio. 1917-18 -. £3,312,905 •£5,500,385 60.23 p.c 1918-19 , .. 3,728,420 5,918,455 62.99 p.c 1919-20 . .. 5,765,337 8,371,535 6S.87 p.o 1920-21 . . 4,711,192 5,925,791 £0.01 p.c 1921-22 .. 4,294,230 7,427,410 57.82 p.c 1922-2;! , .. 4,564,605 7,974,011 57.24 p.c 1923-24 . . 4,072,101 7,196,347 56.59 p.c

Year. Advances, etc. Deposits. Ratio. 1917-lfi .. £16,466,493 £30,437,936 54.10 p.C 1918-19 • • 17,389,787 31,716.353 54.83 p.c 1919-20 .. 17,929,6)5 37,661,610 47.G1 p:c 1920-21 .. 27,725,874 34,475,655 80.42 p.c 1921-22 .. 23,312.130 28,676,603 81.29 p.c 1922-23 .. 17,746,718 30,003.926 59.14 p.c 1923-24 . - 18,787,100 30,501,719 61.59 p.c