BANKING OPERATIONS

Otago Witness, Issue 3618, 17 July 1923, Page 23

BANKING OPERATIONS

QUARTERLY STATISTICS. TRADE OUTLOOK PROMISING. RECOVERY FROM TIIE SLUMP. (From Our Own Correspondent.) WELLINGTON, July 9. The banking returns for the June quarter, which are now available, reflect the economic conditions of the dominion, and those conditions are exceedingly good and satisfactory. The country has completely recovered from the slump of 1920-22, tor the deposits are once again in excess of tne advances. The salient features of the bunking returns may be summarise! as follows: Government deposits increased £398,327 Free deposits increased 3,229,731 Fixed deposits increased 1,08-I,‘Us Advances decreased 1,211,8-3 Discounts decreased 232.8R7 Circulation decreased 574.076 Coin increased 107,383 The fixed and free deposit increased by £4,294,066 as compared with the June quarter of last year, while the advances decreased by almost a corresponding amount. This means that, compared with a year ago, the customers have borrowed less, while their credits at the bank have increased. Taking the several classes of deposits, the position is as under: Deposits. June. 1922. June.. 1923. Increase. Government ... £6,010,714 £6,400,011 £398,327 Free 25.046,473 28,276,204 3,200,731 Fixed 16.342.413 17,406.743 1,064.335 £47,390.600 £52,091,993 £4,692,393 The free deposits or current .account balance show a decided improvement, and this has been brought about largely by curtailing imports and liquidating old stocks. Merchants are now, however, increasing their stocks, and imports arc agat-i expanding. All the banks share in the increase in tho current account balances, as the following figures show : Bank. June, 1922. June, 1923. Increase. New Zealand ... £11,745,717 £13,102,589 £1.355,872 Union 2.932,926 3.519,170 536.244 N.S. Wales ... 2,074.440 3,131,939 457.499 Australasia ... 2,377,393 2,656,56.3 279.170 National ... 4.800.763 5,121.408 470.r.4. r i Commercial ... 614,2-4 Total ... £25,046,473 £28,276/204 £3,229,731 In the September quarter of 1920 tho free deposits amounted to £36,486,999. By the following September the amount had dropped to £26,773,325. and were at their lowest in December last, when the amount stood at £23,542,867. In the March quarter there vgas an increase of £26,445,502, and for Ofe June quarter there was a further rise to £28,276,204, so that in the first half of this year ihe current account balances increased by £4,733,337. The fixed deposits show' an increase of £1,064,335, but the total of £17.406,748 is below the totals of tho September and December quarters of last year. All banks shared in the increase in this class of deposits, as shown in the table appended : Bank. June, 1922. Juno. 1923. Increase. New Zealand ... £8,370.643 £3.705.119 £334,471 Union 1,817.170 2.301,595 484,425 N.S. Wales ... 2,332,79.9 2,380,597 47,793 Australasia ... 1,108,559 1,205,682 97,123 National 2.457.817 2.551.426 93. nw Commercial ... 255.420 202.329 0.903 Total ... £16.342,413 £17,406,743 £1.054.3.i5 The fixed and free deposits for the June quarter of each of seven years were as follow : -- June Fixed Free To&l Quarter. Deposits. Deposits. Deposits. 1917 £13,.819.184 £23,380.996 £37,200,180 1918 13,929.450 22,110.623 36,040,078 1919 14,753,346 28,252,583 43,005,929 1920 16.243,911 38.354,181 54,598,092 1921 16.246,462 29,204,633 45.511,095 1922 16.342.41.3 25.046.473 41,388.886 1923 17,406,748 28,276,204 45,682,952 The advances, as already pointed out, decreased by £4,211,823. arid all the banks except the Commercial Bank of Australia contracted their advances, as is shown in the table appended : Bank. Juno, 1922. June, 1923. New Zealand £19.921,432 £17,208,307 £2,713,125 Dec. Union ... 5,729,257 5,103,250 621,007 Deo. N. 3. Walos... 4.797,224 4.675,680 121,544 Doc. Australasia 5,538,533 4,1i5t,486 557,047 Deo. National ... 7,660,395 7,395,148 265.247 Deo. Commercial 797,076 863,223 66.147 Inc. Total ...£44,438,917 £40,227,094 £1.211,823 Dec. The discounts for the past quarter aggregated £1,454,130, as compared with £1,717,017 —a decrease of £232,837, in which all the, banks shared. The averages of the advances and discounts for the June quar-

for' sach of sever, years shown are as follow: June quarter. Advances. Discounts. Totals. 1917 ...• ...£26,809,616 £1.470, ,687 £28,280,303 1918 31,563,307 1.24 4.491 32.807,801 1919 30,887.729 1.522.978 32,410,707 1920 33,457,183 1,332,393 34,789.581 1921 51.448,528 2.935,939 64,385,485 1922 44,438,917 1,717.017 46,155,034 1923 40,227,004 1,484,180 41,711,274 Borrowing from the banks lias contracted steadily during the past two years, while the deposits, or customers credits, have as steadily increased, and this is shown in the table below: Quarter. Deposits. Advances. Kxcess of Dee., 1920 ... £49.456.893 £47,113.295 £2.338.5980 Mar., 1921 ... 47.155,730 52.446.341 5,290,611 A June, 1921 ... 45,511,095 54.385.435 8.874.390 A Sept., 1921 ... 43,445.663 48.039,609 4.593,946 A Dec., 1921 ... 40.935,621 47.558,726 6.623.105 A Mar., 1922 ... 40,360,389 46,491.314 6.130,925 A Juno. 1922 ... 41.388.836 46.155,934 4.767,048.4 Sept,. 1922 ... 41.961.866 42,994,4-18 1.032,5824 Dec., 1922 ... 41.104,418 43.431,016 2.326.597 A Mar.. 1923 ... 43.465.816 42.521.573 944.4321) June. 1923 ... 43.682.952 41,511,274 3.971,67 RD For the two years—that is, in 1921 and 1922—ihe banks advanced or lent to their customers more than the total of their fixed and free deposits, but now the position lias become normal again and the bank advances are within legitimate limits, tho decrease on the note circulation, os compared with tho June quarter of last year and amounting to £574.075. is another indication of the favourable change in the conditions. It can be safely stated now that New Zealand has quite recovered from the slump, and in the current half-year there should be increased n-ctivity in trade and commerce. If the pricey for our primary products remain at their present level or even aro a little lower, we should still do well, provided there is an increase in production. The outlook is very promising for general business activity, but we must always reckon with outside conditions which may at any moment cause a set-hack. The advance in the minimum rate of the Bank of England to 4 per cent., which was announced last week, and the somewhat rapid fall in sterling exchange on New York, are not very encouraging signs.