BANKLNG RETURNS

Otago Witness, Issue 3018, 17 January 1912, Page 8

BANKLNG RETURNS

THE DECEMBER QUARTER. A NOTE OF WARNING. (From Odh Special Correspondent.) . WELLINGTON, January 10. The banking returns for the final quarter of 1911 arc now available, and the figures disclose some extraordinary features. Compared with the December quarter of 1910 the advances show an enormous expansion, the increase amounting to no less a sum than £3,538,034, while the discounts arc practically stationary. With this largo increase in advances, one would imagine that the deposits would show some corresponding increase, but, as a matter of fact, the free deposits increased by only £813,487, and the fixed deposits by £54,325, or together by £867,812. A year ago the free deposits wore larger than in 1909 by £1,947,905, and the fixed deposits were less by £145,831. Tho advances increased by £906,517, while the discounts disclosed a shrinkage of £32,698. The abnormal features exhibited by the returns now under review require some explanation. At all events business men would do well to carefully analyse the figures, and decide upon their future course of action. Turning first to the aggregate assets and liabilities the comparison with 1910 is as under :

The assets of the Bank of New Zealand within the Dominion arc less than the liabilities, and the reason for this was explained by the acting chairman at the half-yearly meeting held last month. It is interesting now to examine the advances and see to what extent the several institutions" have been drawn upon. The comparison is as under: Bank. Dec., 1910. Dec, 1911. Increase. £ £ £

The banks have been most generous in meeting tho demands of their customers, and the position is somewhat similar to what it was in 1908, but at. that time there was good reason for the heavy demands on the banks. The American financial crisis of 1907 reacted on New Zealand, and there was something in the nature of a depression, but there is no such excuse for the demands that have been made on the banks in tho past quarter. It is to bo feared that excessive imports partly account for the ■ unfavourable condition. No doubt there are other causes operating. Also turning to the discounts we find that the aggregate is less by £419 than a year ago. The figures of , tho several banks compare as under: — i

* Decrease. The movements of the advances and discounts may bo better observed by comparing the figures for seven years. The table appended will therefore be interesting:— Dec.

The last total is easily a record, and exceeds the previous highest (in 1908) by £1,764,252. Now wo come to the deposits and the several groups compared as under: —

The total shows an increase of £1,163,570, largely due to the expansion of Government deposits. The free deposits, as already stated, increased by £813,487, and all the banks shared in the movement, as the following table shows: Bank. Dec., 1910. Dec., 1911. Increase.

Tho fixed deposits increased by only 1 £54,325. The Bank of New Zealand secured an increase of £148,461, and the Rank of New Soutli Wales an increase of £12,547, but all the other institutions exhibit shrinkages. Taking the free and fixed deposits for a period of seven years we get the folowing ; . I

Another table that is of particular interest just now is a comparison of the fixed and free deposits combined, with the advances and discounts. The figures are appended:

In 1908 the advances exceeded the deposits by £2,001,698, and excepting that the return for December, 1911, is the most unsatisfactory, the note circulation shows an increase of £48,232, and coin and bullion together an increase of £323,705. The figures under these two heads for a period of seven years show as under:— ,

If wo take the note circulation as indicating the condition of local trade, the close of 1911 was infinitely better nhan 1910, but the mystory of the abnormal increase in advances still remains. There is some extraordinary undercurrent operating, and the business community should take note of the matter. It is obvious that extreme caution is advisable .until the situation appears clearer. The current quarter may give a different complexion to the position.

Assets Liabilities ... Dec, 1910. ... £27,590,043 ... 26,202,569 Dec, 1911. £31,461,836 27,450,469 £1,387,474 £4,011,367

New Zealand ... 6,711,216 8,311,551 1,600,333 Union ... 3,173,617 3,682,193 508,581 New South Wales ... 2,563,832 3,078,097 514,265 Australasia 2,789,463 3,273,534 484,071 National ... 2,612,487 3,043,269 430,782 £17,850,615 £21,388,649 £3,538,034

Bank. Dec, 1910. Dec, 1911. , Increase. New Zealand £896,640 £898,970 £ 2,330 Union 195,169 211.537 16,367 N.S. Wales ... 181,356 143,889 *37,467 Australasia ... 243,039 254,920 11,881 National ... 286,569 293,038 6,469 £1,802,773 £1,802,354 *£419

quarter. Advances. Discounts. Totals. i 1905 £14,031,460 £2,136,484 £16,217,944 1 1906 15,622,549 2,126,376 17,748,923 1907 17,913,858 2,069,272 •19,883,130 1 1908 19,123,523 2,300,228 21,423,751 1909 16,944,098 1,835,471 18,779,569 1910 17,850,615 1,802,773 19,653,388 1911 21,388,649 1,802,354 23,191,003

Govt, deposits Free deposits Fixed deposits Dec, 1910. ... £1,830,155 ... 12,120,977 ... 10,442,341 Doc., 1911. £2,125,913 12,934,464 10,496,666 Totals . £24,393,373 £25,557,043

£ £ £ New Zealand 5,649,813 6,055.401 405,588 Union ... 1,641,929 1,786,900 144,971 N.S. Wales 1,590,114 1,619,286 29,172 Australasia 1,328.032 1,452,096 124,064 National ... 1,911,089 2,020,781 109,692 Totals £12,120,977 £12,934,464 £813,487

! Dec. Free Fixed quarter. Deposits. Deposits. jg Total. 1905 8,836,507 9,776,098 18,612,605 1906 10,250,540 9,843,258 20,093,793 1907 11,136,009 9,651,294 20,787,213 1908 9,529,657 9,892,396 19,422,053 1909 10,173,072 10,588,172 "20,761,244 1910 12,120,977 10,442,341 22,563,318 1911 12,934,464 10,496,666 23,431,130

Dec. Excess of qrtr. Deposit*. Advances. £ 16,217,944 Deposits. 1905 18.612,605 2,494,661 1906 20.093.798 17,748,923 2,344,875 1907 20,787,213 19,983,130 804,083 1908 19,422,053 21,423,751 1909 20.761,244 18,779,569 1,981,675 1910 22,563,318 19,653,388 2,909,930 1911 23,431,130 25,191,003 240,127

Dec. Note Coin & quarter. Circulation. Bullion. 1905 . ... £1,468,834 £4,052,173 1906 ... . .. ... 1,611,221 4,696,758 1907 ... . 1,641,858 4,874,566 1908 ... . 1,607,222 4,585,756 1909 ... . 1,573,955 5,090,845 1910 ... . 1,649,928 5,028,248 1911 ... . 1,698,160 5,351,953