BANKING RETURNS.

Otago Daily Times, Issue 19764, 15 April 1926, Page 10

BANKING RETURNS.

Government * deposit* ... £ 3,193,614 £4,T0,194 £818,580 Prop deposits... 29,765,517 26,865,851 *2,899,666 Fixed deposits 20,131,711 20,436,629 301,918 £63,090,842 £51,314,674 *£1,776,168 * Decrease

March, 1925. March, 1926. Increase. Vew Zealand £10,056,081 £10,415,869 £2a9,78S Union 2,424,246 2,261,919 *162,337 K S Wales ... 3,018,340 2,685,104 • 333,236 Australasia ... 1,597,008 1,741,818 144,810 National 2,788,416 3,027,724 239,308 Commercial ... 247,620 304,195 56,575 £20,131,711 £20,436,629 £304,918

March "Free Fix?*! Total quarter. deposit?. deposits. deposits. I>l2l ... £30,785.205 £16,370,535 £47,155,730 1323 ... 24,138,746 16,221,644 40.360,3110 1H23 ... 36,445,503 1,702,314 43,465,81 b 1H24 ... 28,436,163 18,597,130 47,033,203 1025 ... 30,765,517 20,131,711 40,807,228 1026. ... 26,865,851 20,433,620 47,302,480

March. 1025. March. 1026. Increase. New Zealand ... £18,451,092 £19,941,342 £149,020 Union 5,120,915 5,836,605 715,780 N.S. Wales ... 5,055,524 5,072,249 916,725 Australasia ... 4,625,868 4,903,774 277,906 National 7,730,464 8,494,319 763,855 Commercial ... 1,042,087 1,223,924 181,837 £42,025,950 £46,372,303 £4,346,353

The advances and discounts in the aggregate show an increase of £4,554,880 over the figures of the corresponding quarter of last year, while on a similar comparison the aggregates of the tree and fixed, deposits show a decrease of £2,594,548, which is from being satisfactory. The advances should have created deposits, and it ts obvious that the credits obtained from the banks have been transferred beyond New Zealand to pay for imports, etc. The banks are, fortunately, in a position to meet further large demands for accommodation, but whether thay will pursue a policy of free lending is quite another matter. With the contraction in the exports the time has arrived for curtailing imports, and an increase in the vote of interest would hasten the* process. An interesting table is obtained by taking the aggregates of the fixed and tree deposits which practically represent the borrowings of the banks from the public, and the advances and discounts which represent the borrowings of the public from the banks, and see how they stand in relation to one another. The position is disclosed in the table appended: March Excess of

qi alter. Ttepofits. Advances.etc. deposits l!m ... £77,155.730 £52,446,341 • £5,290,611 1922 ’ ... 40,360,390 46,491,315 •6,130,935 1923 ... 43,465,816 42,521,573 944,243 1924 ... 47,033,293 44,403,524 2,629.769 1925 ... 49,897,228 43,730,262 6,766,966 1026 ... 47.302,480 48,285,142 * 082,862

March quarter. Circulation. Coin, etc, 1021 £7,830,206 £7,662,558 1822 7,510,451 7,777,880 1823 6,532,182 7,828,267 1824 6,600,869 7,877,258 182-5 6.684,046 7,727,805 1026 6.830,082 7,701,455

THE MARCH QUARTER. COMPARATIVE FIGURES. SUBSTANTIAL INCREASE IN ADVANCES. (Fbosi Ode n ws CobeespokdentJ WELLINGTON, April 14. In view of the contraction in the volume of our exports and the expansion in the imports, as was shown by the trade returns to the end of February, the banking returns for the first quarter of the year are of more than passing interest. In the December quarter there was a substantial increase in the advances and a moderate ircrease in both classes of deposits. For the quarter under review the advances are very much larger than they were a year ago, while, the tree deposits nave contracted and the fixed deposits show a gain of only £304,918. . . , „ Dealing first with the deposits, the Government free and fixed deposits show the following movements: — 1 March, 1925. March, 1926. Increase.

Although the Government and fixed deposits increased, the heavy shrinkage in the free deposits converts the aggregate into a substantially smaller amount than that shown in the first quarter of 1925, when produce prices were on a high level. Turning to the free deposits, the actual shrinkage totals £2,899,666, and the figures of the several banks compare as under; March, 1925. March, 1926. Decrease. New- Zealand ... £13,785,381 £12,588,438 £1,197,943 Union 3,968,545 3,176,309 792,236 V s Wales ... 3,215,228 3,853,563 361,665 Australasia ... 2,910,368 2,669,424 240,944 National 4,988,387 4,639,189 349,198 Commercial ... 896,608 938,833 • 43,275 £29,765,517 £26.865.851 £2,839.666 • Increase. The Commercial Bank shows a trifling increase, but all the other banks show more or less heavy contractions. The free deposits as the current account balances represent the capital of traders in the main, and the shrinkage is therefore significant. The fixed deposits disclose the modest gain of £304,918, and the figures of the several banks are appended:

♦ Decrease Tlie Union Bank and the Bank of Now South Wales show comparatively heavy decreases, end the other banks moderate increases, and taking the aggregates of the free and fixed deposits for the March quarter of each of the past six years the movements are shown in the table following :

Compared with the corresponding quarter of last year, both classes of deposits have contracted by £2,594,548. The advances and discounts are perhaps the most interesting items in the banking returns, for they show the trend of economic conditions in the Dominion. The advances show the substantial increase of £4,346,353, compared with the figures of a year ago, and all the banks have been drawn upon heavily for accommodation, as will be seen by the table appended:—

The discounts have increased by £208,527, but in this expansion the Bank of Australasia has not shared. The figures of that institution decreased by a tew thousand pounds, as will be seen by the following figures: March, 1925. March, IMS. Increase.

New Zealand ... £1,114,534 £1,249,052 £13,418 Union 45,499 47,763 2,264 N.S. Wales ... 145,937 164,028 18,091 Australasia ... 155,293 147,909 • 7,384 National 210,506 256,588 46,083 Commercial ... 32,543 47,499 14,956 £1,704,312 £1,912,839 £208,527 * .decrease. The discounts and advances represent the accommodation given by the banks to their customers, and the aggregates for the March quarter of six years show as under: March quarter. Discounts. Advances. Totals. 1921 ... £2,950,208 £49,496,133 £52,446,341 1922 ... 1,739,133 44,752,177 46,491,315 1923 ... 1,736,222 40,785,351 42,521,573 1924 ... 1,770,066 42,633,458 44,403,524 1925 ... 1,704.312 42,025,950 43,730,262 1926 ... 1,912,839 56,372,303 48,20u,143

• Excess ot advances. While last year the deposits exceeded the advances by £6,166,966, this year the advances exceed the deposits by £982,662, and that clearly demonstrates the change that has come over the economic situation in the 12 months The note circulation and coin and bullion remain to b© reviewed, and the aggregates of these show as under: —

The note circulation shows an increase of £136,936, and the coin and bullion an increase of £63,550. It cannot bo claimed that the banking figures show a satisfactory economic position, and it seems clear that there must be a reduction in imports or a great expansion in exports before equilibrium is established. The accommodation obtained from the banks in the past quarter was £4-,554,880 creator than the amount borrowed in the first quarter of 1925. and instead of deposits showing an increase as the result of this borrowing, there is an actual decrease in the deposits of £2,594,548, indicating that the accommodation obtained from the banks has been transferred overseas, presumably to pay for imports. The force of circumstances will no doubt compel importers to reduce the volume of their indents. In the meanwhile the position is likely to cause some anxiety.