BANKS SURVIVE STRAIN

Poverty Bay Herald, Volume LV, Issue 17609, 27 October 1931, Page 5

BANKS SURVIVE STRAIN

STABILITY IN BRITAIN PUBLIC CONFIDENCE CONTINUES LONDON, Septs 9. Public confidence in the stability of British banks continues firm after six months of suspense, during which the nation’s financial armor was. put to a severe strain. t One. siugle rumor, quickly denied, of an unknown- British bank involved in difficulties, was circulated on tire Cohtinent early in August, but otherwise the financial >1 atmosphere, remained clear. Caution has been installed as the policy of alh of the English banks. During 1930 only one of the Big Five banks, reduced its'final dividend, but at the end of the first six months of 'this year,: four had cut tlieir interim dividends. The cautious: distribution ’ was explained by tho-diininishment. of profits due chiefly, to the. weakness of the banks’ creditors, here and abroad! Estimates of the'.'decrease • iii bank profits are not given to the public, but are generally believed to .be slight. There,was a decline of J 345,000,000 in the aggregate total of advances, (lie most profitable outlet for bank funds. Barclay’s was tho only ono.of the Big Five td maintain its. interim dividend rate. Lloyd’s was at the per. annum rate of 13£ per cent., compared to last year’s 15 per cent. The ,Midland, National Provincial .and Westminster banks reduced their ; rates by one per cent, actual. The former two cut their interim dividends from 18 to 16 per cent, and the West-minster-bank reduced from 20 to 18 per cent. Several Lancashire banks made similar reductions. *' The banks’ caution and tendency to reduce their, outstanding loans since the Hiitrv crash, has-been criticised in commercial quarters, but the bankers insist oh standing by the “old-fashioned” ‘British, methods. They point to the fact that Great Britain's banks have successfully withstood one of the severest storms of industrial depression ever experienced, while many banks in Central Europe and the United States have experienced difficulties because they were involved in speculative commercial enterprises.