BANKING RETURNS.

Otago Daily Times, Issue 20690, 12 April 1929, Page 10

BANKING RETURNS.

FIGURES FOR MARCH QUARTER. INCREASE OF FIXED DEPOSITS. INVESTORS SHOW LACK OF CONFIDENCE. (Special to Daily Times.) WELLINGTON, April 11. The one fact that emerges from an analysis of the bank averages for the first quarter of the year is that banking credit is in apparent excess of the requirements. This feature will be considered later on. Compared with the March quarter of 1928 the deposits of all classes have increased as will be seen by the table appended:— Mar., 1928. Mar., 1929, Increase. Deposits £ £ £ Government 2,378,577 2,864,439 485,862 Free .. .. 24,482,151 23.736,743 1,254.592 Fixed .. .. 23,476,144 29,608,752 4,132,603 Totals .. 52,336,872 58,209,934 5,873,062 The increase of £5,873,062 is equal to over 11 per cent., but it will be noted that nearly four-fifths of the increase, is in fixed deposits, which is not very satisfactory from the point of view of domestic trade. Compared with a year ago the demand on free deposits exhibits a gain of £1,254,592, in which all the banks shared as under:— Bank. . Mar., 1928. Mar., 1929. Increase. New Zealand 11,502,643 12,272,662 770,019 Union .. .. 2,838,375 2,910,214 80,839 N.S. Wales .. 2,589,491 2,766,998 177,507 Australasia .. 2,473,118 2,547,417 74,299 National .. .. 4,148,062 4,271,455 123,393 Commercial .. 930,462 958,997 28,533 Totals .. 24,482,151 25,736,743 1,254,592 These call deposits represent about 44 per cent, of the total deposits, while the time, or fixed, deposits arc equal to just over 50 per cent. Last year the free deposits were 46.60 per cent of the total, and the fixed deposits joist under 50 per cent. In the opinion of Mr Reginald M'Kenna, chairman of the Midland Bank, a close agreement exists between business conditions and the proportion of current accounts to total deposits, and if this is correct then business conditions in the Dominion are to-day about 2 per cent, worse than a year ago. There is again an abnormal increase in time, or fixed, deposits, and this has been a feature of the banking position for several quarters past. The fixed deposits held by each bank and the increases for the year are as under:— Bank. Mar., 1928. Mar., 1929. Increase. New Zealand 12,545,565 14,622,324 2,076,759 Union .. .. 2,827,472 3,458,484 623,012 N.S. Wales .. 3,323,768 3,922,462 598,694 Australasia .. 2,207,672 2,610,863 403,191 National .. 4,040,592 4,345,035 304,443 Commercial .. 531,075 657,584 126,509 Totals .. 23,476,144 29,608,752 4,132,608 Comparing the two classes of deposits as averaged for the March quarter of each of five years the position is as under:— Free Fixed March deposits. deposits. Total, quarter. £ £ £ 1925 .. 29,765,517 20,131,711 49,497,228 1926 .. 26,863,851 20,436,629 47,302,480 1927 .. 24,440,778 21,085,034 45,528,812 1928 24,482,151 23,476,144 49,958,293 1929 .. 25,736,743 29,608,752 55,345,495 It will be seen that in 1925 the demand deposits exceeded the .time deposits _ fay over £9,000,000, while for the quarter just ended the time deposits exceed the demand deposits by nearly £4,0007000. Since 1925 the demand deposits have contracted by £4,000,000, while the time deposits have increased by £9,500,000, and it is only in the last two years that the increase has been most marked. It would seem that those with capital are either afraid to invest or can find no suitable investment, and are content to_ obtain a small rate of interest and let their bankers do the investing, but bankers are not findthe task an easy one. There has been a slight increase in bank advances, but there is a shrinkage in discounts. Dealing with the advances, the figures show an increase as compared with last year of £609,829, but not all the banks shared in this increase, for the Bank of New. Zealand and Bank of New South Wales show decreases. The figures are as under: — Bank. Mar., 1928. Mar., 1929. Increase. £ £ £ New Zealand 19,616,035 19,240,355 *375.689 Union .. .. 5,277,741 5,376,078 08,337 N.S.W 5,878,206 ■ 5,788,360 *89,846 Australasia 4,554,655 4,737,430 182,784 National .. 7,974,073 8,516,319 542,247 Commercial 1,264,766 156,753 251,987 Totals .. 44,565,475 45,175,304 609,829 * Indicates decrease. The discounts were less by £320,455 and the bill portfolios of all the banks were smaller, except the Commercial Bank, which had am increase of £18,978. The aggregates of the discounts and advances for the March quarter of each of the past five years are as under:— March quarter. Discounts. Advances. Total. . £ £ g 1925 .. 17,043,312 42,025,950 43,730,262 1920 ~ 1,912,839 46.373,303 48,285,142 1927 .. 1,861,619 48,939,189 50,800,808 1928 .. 1.504,893 44,565,475 46,070,370 1929 .. 1.184,440 45,175,304 46,359,744 The accommodation sought from the banks this year and last year is very much less than in 1926 and 1927, and the position to-day is that the ' banks have more money than for which they can find suitable employment, and this is more clearly seen in the accompanying table: March . Excess of quarter. Deposits. Advances. deposits. 1923 .. 49,897,228 43,730,262 6.166,966 1926 .. 47,302,480 48,285.142 *982,662 1927 .. 45,328,812 50,800,808 *5,271,996 3928 .. 49,958,295 46,070,370 3,887,025 1929 .. 55,345,495 46,359,744 8,985,751 * Excess of advances. The figures show that there is no credit shortage in the Dominion, and it is obvious that for some reason or other the owners of the bank deposits ave not prepared to invest in enterprises, a'nd so money has accumulated in the banks. The banks are in a position to lend a great deal of money, and no doubt would do so if adequate security were forthcoming. The circulation and coin aggregates are as follow: — March quarter. . Circulation. Coin. 1925 .. .. 6,694,046 7,727,905 1926 .. .. 6,830,982 7,791.453 1927 .. .. 6,603,681 7,875,043 1928 .. ~ 6,376,668 7,867,459 1029 .. .. 6,370,894 7,263,361 There is a slight contraction in the note circulation as compared with last year, but as there has been an increase in the fixed deposits, the spending power is greater by £1,200,000 than it was a year ago. The position is not much better than it was a year ago, and the most disappointing feature is the abnormal increase in fixed deposits. It is a great pity that there is this lack of confidence. -