COMPANY BALANCE SHEET

Otago Witness, Issue 3765, 11 May 1926, Page 18

COMPANY BALANCE SHEET

Mar. 31, 1926 ... 678,036 62,968 10 This is one of the most youthful banking institutions in this part of the globe, and in consequence it does not perhaps deal in figures of such magnitude as those of the majority of its competitors. Its activities are mainly confined to Victoria, the State of its birth, and its results exhibit a satisfactory growth. Following the custom of issuing its statement of accounts half-yearly it divides its annual rate of dividend of 10 per tent into two parts. The latest pub iished statement shows a net profit of £52,968 for the 6ix months, and 70 per cent, of I his sum is absorbed in dividend. An addition of £IO,OOO is made to reserve fund, leaving £5468 to swell the floating balance. With this augmentation, tbe directors feel justified in withdrawing £IO,OOO from the accumulation, and reserve fund is benefited accordingly. A saving of some £IOOO has been effected in the charges covering the period. As usual, these are aggregated, and it cannot be discerned in which direction this reduction has taken place. It is noticeable, however, that although income and land taxes are included in the group the total remains at a fairly even figure. Below is a table showing the relation of the charges to gross profit:

On the other side of profit and loss account, there has been a rise in revenue of approximately £3BOO after the usual deductions, and after provision for bad and doubtful debts. The credit balance is thus £4BOO over that of the previous half-year, and the slight set-back that had been experienced has been partly made up. The comparatively short interval between the balancing dates tends to accentuate what fluctuation may take place in the course of the bank’s business. The chief asset—bills discounted and other advances—stands at £4,362,713. Apparently the community among which the bank operates i 9 passing through a time of piosperity as, although there is a rise in advances, it is to an extent that may be attributed to an expanding business, whereas there is a more substantial growth in general deposits. Putting one opposite the other, the result is as follows:

Coin, bullion, etc. at £1,299,765 form the next largest asset. They have risen during the past six months and stand higher than at other recent balancing dates. Investments are entered at the round figure of £575,000 The composition of them is not defined beyond that they consist of public stocks (Government, municipal, and general), debentures, and funds. What this last item may represent is not clear. Presumably it refers to investments of a miscellaneous nature. Tbe proportion that such hold to the otheis is of some importance. The total investments, ) ewever, do not reach the level of the reserve fund. Bills receivable and remittances in transit stand at £674,330 At the close of the March half-year, they apparently stand higher as a rule than at the end of the other half.

The fixed assets, consisting entirely of bank premises, remain at £157,000 There is no mention of any additions having been made during the period, and the value is evidently considered s conservative one, as no part of the surplus has been devoted to writing down the property There are a head office and nine branches representing the bank, but how far the business is oonducted in its own premises is, of course, not ascertainable from the printed accounts.

Reserve fund, with its latest additions, bas reached £650,000, after a steady growth There is a considerable margin of profit retained each time when making tbe distribu tion among the shareholders, and, during the past year, a total of £30,000 has been added to the fund. When it is considered tbal the paid-UD capital is £750,000. it should on'y be a matter of a few years before the re serve fund is equal to that sum As re gards reserves generally, it is not quite clear where tbe provision for bad and doubt ful debt® that is referred to finds a place in the balance, sheet. Apart from deposits, the only liability to outsiders is bills in circulation at £415,561, and the practically negligible sum of £6BB in notes. Of he subscribed capital, there is Hill sufficient available for calling upon to double the amount paid up and more. Whether it will be the directors’ policy to raise f urther capital to meet requirements in this way-or by i sibling fresh shares remains to be seen, but, as the bank grows older and develops its business, more funds will be required, if it maintains a separate existence.

THE ROYAL BANK OF AUSTRALIA (LTD.). Paid-up capital, £750,000. Six months Dividend ended Deserves. Kct profit, per annum. £ £ p.c. Mar. 31, 1025 ... 6-»l,R0a 63.363 10 Sep. 30, 1025 ... 662,568 48,170 10

Period ended charges. profit Rat o. « * P-c. Mar. 31. 1025 ... 45,270 1C8.633 41 C7 Sep. 30, 1025 ... 47,164 95.334 40.47 Mar. 31, 1026 ... 46.162 90.130 46.57

Period ended Advances. General deposits Ratio. £ £ p.c. Mar 31, 1925 . .. 4.550,810 4,677.525 97.29 Sep. 30, 1925 .. 4.286.'; 23 4,664,126 91.91 Mar. 31. 1926 . .. 4,362,713 5.045.447 86.47 It ’B to the interest-bearing deposits i that the recent rise > is mainly due.