NATIONAL BANK OF NEW ZEALAND.

Otago Daily Times, Issue 20799, 19 August 1929, Page 12

NATIONAL BANK OF NEW ZEALAND.

ANNUAL MEETING. MR W. PEMBER REEVES’S REVIEW. (From Opr Ows Correspondent.) LONDON, July 12. Mr W. Pember Reeves presided at the annual meeting of the National Bank of New Zealand on Wednesday, and made his customary review- of the financial and commercial situations in the Dominion. I’aid-up capital, said the chairman, remained unchanged at £2,000,000, and the reserve fund stood at the same figure. The reserve fund was entirely invested in British Treasury bonds and Dominion Government securities. Note circulation showed a slight increase of £140,000. The average circulation of all the banks in New Zealand during the year was £6,373,000, and they had the right of issue up to £12,190,000. The deposit and currclit accounts were reduced from £12,088,000 to £10,567,000, a difference of about £1,500,000. As a matter of policy they decided to pay off a large proportion of the long-dated deposits in London rather than continue them at high rates of interest. On the other hand, bills payable and other liabilities wore increased by £1,234,000. CASH AND INVESTMENTS. On the assets side of the balance sheet, coin and bullion and money at call were down by £900,000, due partly to the reduction of liabilities under deposits and partly to the earlier return of funds to New Zealand. Coin, at £851,000, showed a decrease on last year’s figures of £IOO.OOO. This was accounted for by the increase of the same amount in their investments, which now stood at £2,230,000. They thought this a profitable exchange, ’ as their coin reserves in the Dominion were high enough for all practical purposes, receivable and discounted showed a net decrease of £740,000, while advances on securities and current accounts were increased by £1,150,000, and now stood at £10,362,000, as compared with £9,212,000 a year- ago. They were satisfied that these were well spread, and that a very large proportion of them were of an entirely liquid character. “So far as possible,” continued, Mr Reeves, “our resources are made available foi the development of trade, and as I have said before, wherever it can be done consistently with the resources of the bank, that policy is being maintained and extended. It ■ will, perhaps, interest you to know that the average percentage of our advances to deposits over the last five years has been just over 89 per cent. Landed property and premises stand at £606,000 at March 31 this year, as compared with £572,000 in 1928. “ Our net profit, after paying a bonus to the staff of £II,BOO, *is £290,600, which shows a small increase of some £BOO. We have again placed £IO,OOO to premises and have allocated £II,OOO to pension and gratuity funds. “We propose to pay you the same dividend and bonus as last year. The carry-forward shows a decrease of £II,OOO as compared with 1928, but, at £155,000, is considerably more than six months’ dividend and bonus. I see no reason to anticipate less favourable business conditions in the future, hut I remember oh one occasian an old shareholder stated that, in paying you a bonus, he considered we were distributing too large a proportion of our profits. However, I will; only repeat what I have previously said—that this matter received our very careful attention, and you may be sure that, if we thought it necessary, we should not hesitate to withhold or reduce it.”. Mr Reeves than gave comparative figures for the six banks in the Dominion for the March quarter, and also figures for the Rost Office Savings Bank. He quoted some general figures regarding external trade. c In speaking of the dairy trade, ho said that there was no doubt that the increase in output of dairy produce had been largely due to the greater use of fertilisers, chiefly superphosphates and lime. The imports of these had trebled in the last six years, and, fortunately for the farmers, the price had fallen considerably. Quite : a large demand for butter had sprung up in Canada, and a fair amount, both of butter and cheese, had been taken in the United States. How far fluctuations in the American tariff were likely to’ affect shipments there of dairy produce, wool, and _ frozen meat remained to be, seen. During the last 15 years—from the first year of the Great War—New Zealand I'ad sokl to the United States £50,000,000 of produce; in return she had bought goods of American origin to the value of £102,500,000. One Mould think that even the legislators of the United States might be satisfied with the position;. it would seem, however, that they were not. The chairman quoted figures regarding wool, meat, and some of the smaller industries. He spoke of the election of tiie new Government. GOVERNMENT LOANS. “During the financial , year ended March last,” he continued, “ the Government has floated two loans, one of £5,000,000 in May, 1928, and one of £7,000,000 iu January of this year. Both were completely successful, the second loan especially so, as the rate on it was several shillings cheaper than on the first loan. In conjunction with the second loan the Government made a conversion offer of £12,000,000 at 4i per cent, to holders of the 4 per cent, loan maturing in November next; £lO4 5s was offered for every £IOO of the 4 per cent, stocky £11,750,000 were taken on. these terms, and this, added to the amounts of 4 per cent, stock converted or cancelled last year, has disposed of the very satisfactory amount of £17,750,000 of the £29,000,000 4 per-cent, stock maturing in November of this year. Ml things considered, these conversions may be regarded as u creditable achievement. They were well timed and managed, and their success must be a relief to the New Zalaud Trasury, ACCOMMODATION TO THE PUBLIC. “You will remember that last year an Act was passed granting •* charter to a new bank proposed, but not yet started, in New Zealand. Since then the newspapers have informed us that two more enterprises are ou foot in Australia to set ni- banks, both of which are to do business in New Zealand. So far as I can gather these three concerns arc still engaged in preliminary operations, and 1 may, therefore, be excused from speculating upon what effect their competi tion, if it materialises, would have upon business. Ail 1 will say is that « six banks now working ' - New laud have 560 branches and. agencies open to customers for business there. There is, therefore, one- banking office to about every 2600 of the population. The banks have lent the public £47,000,000 — a tidy sum for a population f less than 1,500,000, If more were fairly required they could lend it. I would, however, point out that, so far from being niggardly towards the public, they lend a much higher proportion of their deposits than English bankers would dream of doing. Nevertheless, if' I may judge from what 1 read and hear, they are criticised for not lending enough. . The truth is that there is a confusion between bank-

ing and mortgage loans. As I have already stated, there is a loud cry for cheap mortgage money, but it is not our business to supply it, and.it is most unjust to blame us fop not doing so. Furthermore, to suggest that, because banka do not lend up to the last penny of their deposits they are keeping millions of money idle which might go to develop the country is not only wrong, but equally dangerous talk. Again, so far is it from the truth that money is especially dear in New Zealand just now that I may point out that during the last 12 mouths quite an appreciable amount has been sent from New Zealand to Australia because higher rates could be obtained for it iu that continent. AN INCORRECT SUGGESTION. “ With regard to the attacks which I regret to notice are made on the hanks trading in the Dominion from time to tipe, I have no authority to speak for the, other banks, but for our own company I can only say that it has been our settled policy to help primary producers in New Zealand iu every legitimate way. We have a large connection with them and very many solid and valued clients, but to suggest that your dividends mainly come from profits made by us out of our business with fanners and farmers’ companies is, I can assure you, altogether incorrect. . “ You will have noted with regret the death of Mr Robert Logan, who had been for so many years a director of this bank, and who was formerly chairman. In November last we suffered a blow in the quite unexpected death of Mr G. W. MT II tosh, our general manager, who died within a few weeks of the date fixed for his retirement. Some months before this occurred we had selected his successor. This gentleman, Mr Grose, au Australian banker of much experience, had for some time held the post of senior inspector in New Zealand in the service of the Bank of New South Wales. ■ ■ THE STAFF. “ In conclusion, I must again record our best thanks to our general manager and our inspectors, managers, and staff in New Zealand, and to Mr Willis 'and the staff at head office in London. We are fortunate in possessing a loyal and efficient staff, and it is a pleasure to me to acknowledge their unsparing efforts in the bank’s service.”—(Applause.) The chairman concluded by moving—- “ That the report and accounts be adopted and entered. on the minutes; that a dividend at the rate of 12 per cent, per annum for the six months ended March 31 last be now declared, together with a bonus of 2 per cent, for the year, both free of income tax; that the.sum of £II,OOO be placed to officers’ pension and gratuity funds; and that the balance of profit and loss account, amounting- to £155,153 19s 9d, be carried forward.” Mr Henry F. Freshwater seconded the motion, which was carried unanimously. Sir William, Pember Reeves and Mr. Henry - F., Freshwater, the retiringdirectors, were re-elected. ° A vote of thanks to the chairman and directors, as well as to the general manager and officers of the bank in London and New Zealand, concluded the proceedings. ■