NATIONAL BANK OF NEW ZEALAND

Otago Daily Times, Issue 22351, 27 August 1934, Page 2

NATIONAL BANK OF NEW ZEALAND

ANNUAL MEETING A VERY DIFFICULT YEAR GOVERNMENT'S GOLD POLICY (From Our Own Correspondent.) LONDON, July 20. Sir Austin Harris presided at the annual meeting of the National Bank of New Zealand. Sir James Grose (general manager in New Zealand) attended the meeting and took his place beside the chairman. ~.«•■ '" I am sure that everybody will join with the board," said Sir Austin Harris, "in welcoming Sir James Grose, It is a great pleasure to see him here. It was very gratifying to all of us—as it must have been to nimself—when the experience and help which he had offered and accorded to the Government of New Zeailand was recognised rewarded by a well-deserved knighthood." The chairman then announced the election of Sir Thomas Wilford, "the distinguished ex-High Commissioner for New Zealand," to a seat on the board. He also announced that the appointment as manager of Mr A. 0. Norwood, who had , been acting secretary and London manager for the past year, had been confirmed. A DIFFICULT YEAR Despite some improvement in prices and a better tone in the financial and Budgetary position in New Zealand, continued the chairman, the year had again been very difficult from the banking point of view. The difficulty of earning profits in a time of greatly diminished trade had been till now somewhat mitigated by the fact that they had been able to lend large sums to the Government on Treasury bills, but this channel for the employment of funds would be closed to them when the Reserve Bank opened on August 1. In spite of adverse conditions, however, the result of the year's working was satisfactory. " Despite a definite agreement between the Government and the banks," said the chairman, " under which the banks conducted their business for nearly a year, and which was, in fact, embodied in the draft bill—to the effect that failing agreement between the banks and the Reserve Bank this important question should be submitted for arbitration to a special tribunal, the new Act now proposes that the gold, which appeared in their balance sheet at sterling valuation, should be taken from the banks and paid for in depreciated New Zealand currency. We consider that this is unjust. We still hope, however, that there is some chance of fairer views prevailing, and the matter has been resubmitted for further consideration." The second change was in respect of the exchange and contingency account. Last year, they dealt with the £40,000 required in the final allocations, but this year they had deducted it from net profits, because they felt that this amount should be a charge against profits as it represented the amount required for exchange depreciation on increased New Zealand assets including profits for the year. THE BALANCE SHEET The Issued capital remained unchanged at £2,000,000. Note circulation at March 31 was slightly higher than last year at £1,111,0000, the average for the year being £990,000, against a legal limit of £6,228,000. The average circulation for all banks in New Zealand was £6,278,000 against a legal limit of £15,447,000. The new Reserve Bank would from August 1 next assume the sole right of issue of bank notes, so that the notes of the trading banks would be withdrawn from circulation.

Deposit and current accounts at £15,500,000 showed an increase 6ver last year of nearly £2,000,000, and once again constituted a record. Advances, at £8,924,000, were nearly £900,000 down, and these two figures taken together indicated the great difficulty of employing their money profitably in the ordinary way of business. Coin and buillion and cash at bankers and money at call at £1,426,000 showed a decrease of nearly £1,200,000, and that amount, together with the surplus der posits, had been invested in New Zealand Government Treasury Bills, which, including the special loan to the Government, now amounted to £6,500,000, or £4,000,000 more than the corresponding figures in last year's balance sheet. Other investments, at 12,500,000, showed a small increase of £170,000, and landed property, premises and furniture showed no varia» tion on the figures of last year. The gross profit, after making full provision for bad and doubtful debts, was £528,000, as compared with £544,000 a year ago, but against this expenses showed a decrease of £35,000, due very largely to the incidence of income tax, so that the net profit, before deducting the £40,000 already referred to, was £135,000 as compared with £IIO,OOO last year. They proposed to pay a final dividend at the rate of 4 per cent, per annum for the half-year, which absorbed £40,000, and they had allocated £IO,OOO to premises, having in front of them rebuilding at Blenheim and alterations and repairs at other poirtts necessitated partly by damage caused by earthquake. '. During the year the agency at Ruawai ivas converted into a branch, and they had now 83 branches and agencies in the Dominion. Pension and gratuitv funds received the usual allocation of £14,000, and the carry forward was £106,416 as against £114,742 last year. POSITION OF THE DOMINION

A statistical summary of New Zealand trade was issued with the report, and this has been published ill full in The Times. The chairman, after referring to only a few of the figures, concluded as follows;—" It iuust be recognised that in spite of the chaos created by world conditions, New Zealand has striven manfully to meet her difficulties, though it cannot be expected that there will be any return to complete normality until some of the world problems of the price levels and trade restrictions are solved. The immediate prospects of banking are uorie too favourable. We are going through a lean time in New Zealand, and bankers there are facing the saine troubles that they have experienced in London—the great difficulty of the employment of their superabundant funds, but, so far as we are directly concerned, without the opportunities for profitable investment in shortterm securities. I am confident that New Zealand conditions will quickly respond to any favourable turn in world affairs, and that with our large liquid resources we shall be in a position to take full advantage when the time comes."

REPORT ADOPTED Sir James Grose then explained the reasons "why the Government had advanced the exchange rate and the influence upon trade. After this the chairman moved—" Thai the report and accounts be adopted and entered on the minutes: that a dividend at the rate of 4 per cent, per annum for the six months ended March 31 last be now declared, free of income tax. and that the balance of profit and loss account, amounting to £106.410 6a. be carried forward." This was unanimously adopted. Sir Thomas Wilford whs re-elected to a seat on the board, and the retiring directors (Sir Austin E. Harris and Mr H. F. Freshwater) were re-elected. SHAREHOLDERS' APPRECIATION Mr G. R. Ritchie, of Dunedin. moved a vote of thanks to the directors, general manager, and officers of the bank in London and New Zealand. He could well i appreciate, he said, the difficulties Sir i James Grose and his associates had had to contend with during the last few | years and the anxieties they had had to face. Shareholders must be grateful that there was a dividend at all. " W«» are glad to get dividends these days, we in New Zealand." added Mr Ritchie. i Mr Joseph Butler seconded the resolu- j tion. Sir Austin Harris, in reply, said they ; had certainly been going through very i difficult times, and they had not done with thqm yet. They must keep their resources strong and liquid until the time when trade improved, which they hoped was not very far distant. l Sir James Grose. eai.d that the staff

both in London and New Zealand were actuated by the same ideals of loyalty and service to the bank. The reputation of the bapk stood high in New Zealand, and throughout - the two or three very difficult years he thought the bank had gained in'prestige.