THE BANKING RETURNS

Otago Witness, Issue 3853, 17 January 1928, Page 69

THE BANKING RETURNS

DECEMBER QUARTER FIGURES.

INCREASE IN FINED DEPOSITS

WELLINGTON, January 10. The returns of the. six trading banks for the closing quarter of 1927 disclose one satisfactory feature as compared with the corresponding quarter of 1926, and that is that there is a substantial increase in the fixed deposits. Government deposits and free deposits have contracted, and so have advances, discounts, and note circulation. Taking the three classes of deposits, and comparing the figures with the Decern-er quarter of 1926, the movements are shown in the table appended:—

* Increase. The free deposits decreased by £1,700,206, and the Government deposits by £608,215, but owing to the heavy increase of £3,174,613 in the fixed deposits the total deposits at £47,475,991 show an increase of £866,192. At the March quarter the fixed deposits amounted to £21,088,034. In May the banks raised their rate for deposits by 10s per cent. In the June quarter the fixed deposits increased to £21,749,104. In the September quarter there was a further advance to £23,398,246, and in the quarter just ended the fixed deposits at £24,280,160 showed a further increase. The banks apparently did the right thing to attract fixed deposits, and the movements in these show that all the banks were favoured with increases. The figures are as under:—

The free deposits contracted by £1,700,206 as compared with a year ago, but under this heading also the increase on the overdraft rate has had its effect, as well as the increase in the rate for deposits. In March of last year the free deposits totalled £24,440,778. In the June quarter there was a slight increase to £24,741,260. but in the September quarter there ~ was a . sharp contraction to £21,815,504. and in the last quarter there was a further shrinkage to £21,420,897. It will be seen that in the second half of last year there was a marked shrinkage in spending power, which in some measure accounts for the unemployment. Except for a small increase shown by the Commercial Bank, all the institutions showed decreases, and the figures, compared with‘a year ago, <t*e as under:—

* Increase. Taking the December quarter of a series of years, the free and fixed deposits show as follows:—•

In the five years the free deposits are at their lowest, while the iixed deposits

aie at their highest. The advances, com- »£ ’ Ti wwi year ag , 0 ’ a decrease oi £1,308,601, in which all the' banks shared, except the Bank of Australasia, winch shows a small increase of £41,505. the comparison is as follows: —

* Increase. In the March quarter of last year the advances and discounts combined aggregated £08,800,802. In the June quarter they amounted to £50,753,106, in the September quarter to £48,815,231. and in the December quarter to £48,087,780, so that m the last quarter of last year there was a- substantial contraction, the total of the discounts being £1,671,876. The falling off occurred in the second half of the year, or when the higher overdraft rate took effect. The contraction in imports relie-veu the banks of finding acconunodation, and it seems that there must be a further shrinkage in imports. Taking the past five quarters, the excess of advances and discounts combined is still very marked over free and fixed deposits, and the figures are as under:—

The December quarter shows an increase on the September quarter, but the accommodation provided by the banks is very much less than in the December quarter of 1926.

. There is a contraction in the note circulation, but there is a small increase m the amount of the coin and bullion The figures for the December quarter of each of five years show as under:—

The purchasing power during each quarter of the past year, as shown by 7le - ,? e deposits and note circulation, is as follows:—-

Free Quarter. Deposits. Circulation. Total

The spending power of the community contracted during the second half of the Bottom i at t, \ e Decem ber quarter was £3.337,306 less than in the June quarter, which is not very satisfactory.

Deposits. Dee., 1926. Dec., 1927. Decrease. Govt. ... £2,383,149 £1,774,934 £608.215 Free ... 23,121,103 21,420.897 1,700,206 Fixed ... 21,105,547 24,280,160 •3,174,613 Totals ... £46,609,799 £47,475,991 •£866,192 —

Bank. Dec., 1926 Dec., 1927. Increase. N’ew Zealand £10,854,208 £12,144,068 £1.289,860 N.S. Wales... 2,754,073 3,183,113 409,042 Union 2.375,4 8 7 3,695,589 320,102 Australasia ... 1,704,644 2,024.066 319,182 National 3,044,276 3,748,844 704,568 Commercial... 372,859 484,474 111,615 Totals £21,105,547 £24,280,160 £3,174,613

Bank. Dec., 1926. Dec., 1927. Decrease. New Zealand £10,813,196 £9,980,378 £832,818 Union 2,672,047 2,347,788 324,259 N.S. Wales... 2,366,023 2,190,398 175,625 Australasia ... 2,130,751 2,006,628 124,123 National 4,198.661 950,425 3,922,297 276,364 Commercial... 973,408 •22,983 Totals £23,131,103 £21,420,897 £1,710,206

Dec. quarter. Free. Fixed. Totals. 1923 £24,261,042 £18,569,795 £42,830,177 1924 24,776,883 19,899,611 44,676,499 1925 25,189,553 20,840,809 46,030,362 1926 23,131,103 21,105,547 44,256,650 1927 21,420,897 24.2S0.160 45 701.057

Bank.' Dec., 192G. Dee., 1927. Decrease. New Zealand £21,720,724 6.26G631 £21,253,231 £467,463 Union 5,681.549 585,082 N.S. Wales Australasia 6,329,074 5.082,884 6,266,483 5,124,389 •4.505 National 8,646,036 8,460,734 185,302 Commercial 1,351,090 1,301,352 49,738 Totals ~~ .. £49,396,439 £48,087,788 £1,308,651 *—— -

Excess of Quarter. Deposits. Advances. Advances. Dee., 1926 £44,236,650 £51,273,211 £7,035,581 Mar., 1927 45,528,812 50,800,808 5,271,996 June, 1927 46,490,366 50,753,106 4,262,740 Sep., 1927 45,213,750 48.815,231 3,601,481 Dec., 1927 45,701,057 49,759,664 4,058,607

Circulation. Coin and Bullion. 1923 .. . • .. £6,643.900 £7,867,841 1924 .. . . . . 6,749,595 7.722,470 1925 . . . . .. 6,947,677 7,740,219 1926 .. . . . . 6,757,707 7,809,984 192" . . . • - . 6,570,001 7,S66,375

Mar., 192" £24,440,778 £6,603,681 £31,044,459 June, 1927 24,741,262 6,587,002 31,328.264 Sep., 1927 21,815,504 6,279,329 28,094,831 Dec., 1927 21,420,897 6,570,061 27.990,958