THE BANKING RETURNS

Southland Times, Issue 16786, 14 July 1911, Page 5

THE BANKING RETURNS

A CRITICAL ANALYSIS. NEED OF CAUTION EMPHASISED. (Special to the “Times.”) WELLINGTON, July 13. The banking returns for the June quarter are now available and reflect the adverse features of the trade returns. The exports of New Zealand products, according to the Department of Commerce, were valued at £18,992,895 for the vear ended June 30 last, as compared with £20,440.837 for the previous year, thus showing a shrinkage of £1,446,942. The imports, on the other hand, show an increase. Although we have not the figures for the June quarter, the tendency was upwards right up to the end of March. The bank returns reflect these movements. The deposits show tbe small increase of £44,621, compared with the corresponding quarter of 1910. The free deposits increased by £737,059, the two classes of deposits thus showing an expansion of £781,680; hut the discounts, submitted to the same comparison, show an increase of £132,125, while the overdrafts or advances expanded by £2,548,162, the advances and discounts together thus exhibiting an increase of £2,680,287. That is to say, while the public credits with the banks increased by £781,680, the debits were greater by £2,680,287. Moreover the increase In the deposits is fictitious, for it arises through the bank advances. Seeing the great expansion in the advances, the deposits should have been much greater, and that they are not larger seems to indicate that borrowings from the banks have been used to discharge outside obligations. In other words, over importation has been indulged in. The total liabilities ,of the banks in the past quarter amounted to £29,669,627, as against £27,779,358 for the June quarter of 1910, and the average of the assets was £28,794,728, as compared with £25,925,376, the excess of liabilities over assets being £874,899, as against £1,853,982. Assets and Liabilities. The liabilities and assets of each institution, as shown in last return, are as under: — Bank. Liabilities. Assets. New Zealand ..£16,158,961 £12,228,793 Union .. .. 3,521,676 4,453,890 New South Wales 3,683,240 4,028,556 Australasia .. 2,378,375 3,707,549 National .. 3,927,375 4,375,940 Totals . ,£29,G69i627 £28,794,728 The liabilities of the Bank of New Zealand exceed the assets by nearly four millions sterling, while all the other institutions show excess of assets. The large amount held outside of the Dominion by the Bank of New Zealand is, no doubt, in part due to the over Importation already referred to, and also to the heavy credits that have had to bq provided to meet the requirements of New Zealand visitors to London for the Coronation. Deposits. Turning now to the deposits, we obtain the following:— Deposits. June, 1910. June, 1911. Government .. £2,533,480 £3,549,026 Free .. .. 12,946,101 13,683,160 Fixed .. .. 10,515,094 10,559,715 Totals . .£25,994,675 £27,791,901 The Government deposits have increased by over a million 'sterling, and, in view of the political event that must engage the attention of the people towards the end of the year, this increase is not surprising. The other deposits show a comparatively small increase. Taking the June quarter of a series of years, the fixed and free deposits compare as under: — June Fixed Free Quarter. Deposits. Deposits. 1907 .. £9,629,026 £12,213,939 1908 ~ 9,722,662 11,532,286 1909 .. 10,039,089 10,892,670 1910 .. 10,515,094 12,946,101 1911 .. 10,559,715 13,683,160 With respect to the free deposits, or current account balances, all the banks except the National Bank show Increases, as the table appended shows: — Bank. June, 1910. June, 1911. £ £ £ N.Z. 6,918,950 6,374,428 455,478 Inc. Union 1,897,581 1,915,356 17,775 inc. N.S.W. 1,628,281 1,767,308 139,027 Inc. Austrl’sia 2,417,977 2.872,176 454,199 National 2,117,096 2,081,419 35,677 dec. Totals 12,946,101 13,683,160 737,059 Inc. Advances and Discounts. Now we come to the overdrafts or advances, and under this head there is the substantial increase of £2,548,162, which was not equalled during the past six or seven years, except in the year 1908, when there was a slump. The movements in the advances as they affect each bank are given below;— Bank. June, 1910. June, 1911. Increase £ £ £ N.Z. 6,147,700 7,096,320 948,620 Union 2,949,921 3,157,465 207,544 N.S.W. 2,280,730 2,774,249 493,519 Austrl’sia 2,280,730 2,774,249 493,519 National 2,439,900 2,884,180 444,280 Totals 16,236,228 18,784,390 2,548,162 The discounts increased by £132,125, having risen from £1,699,340 to £1,831,465. All the banks except the Union Bank added to their bill cases. The decrease shown by the Union Bank Is the trifling sum of £740. The advances and discounts for the June quarter of five years compare as under: — Juno Qr. Advances. Discounts. £ £ 1907 16,033,352 1,987,162 1908 19,136,576 2,274,841 1909 17,075,129 1,967,253 1910 16,236,228 1,69-9,340 1911 18,784,180 1,831,465 Circulation. The circulation is the next important item, and under this heading there is an increase of £11,222. The circulation Is regarded as a very fair barometer of the domestic trade, and from this point of view the Increase is very satisfactory. The retailers and business people generally must be doing well, although In certain localities there may be dullness. The note circulation and the coin and bullion for five years show as under:— June Qr. Circulation. Coin & Bullion. £ £ 1907 1,694,328 4,755,807 1908 1,666,616 4,917,718 1909 1,623,670 4,966,114 1910 1,645,784 4,994,850 1911 1,717,006 5,103,664 It Is wholly unnecessary to enjoin caution; the figures speak for themselves. And, furthermore. It was only the other day that the chairman of the Bank of New Zealand in his address to the shareholders said: “Whilst the figures I have placed before you emphasise, in my opinion, the necessity for a policy of economy and caution, the Immediate outlook is, speaking generally, by no means unsatisfactory.” The banking returns give point and emphasis to tills opinion.