BANK OF N.Z.

Southland Times, Issue 22351, 16 June 1934, Page 7

BANK OF N.Z.

ANNUAL MEETING THE CHAIRMAN’S REVIEW A SUCCESSFUL YEAR (Special to the Times.) Wellington, June 15. The annual meeting of shareholders of the Bank of New Zealand was held to-day, the chairman of the board of directors. Sir Harold Beauchamp, presiding. In the course of his address Sir Harold said:—

We have not present with us to-day one who took a most prominent part in the affairs of this bank for so many years—l refer to our former General Manager, Sir Henry Buckleton. Joining the bank in Sydney as a junior in 1878, he rose rapidly, step by step, until he attained the position of General Manager in 1920. That office he filled until December 31 last, with credit to himself and to the entire satisfaction of the board. Sir Henry having expressed a desire to be relieved of the cares and responsibilities of office on completion of a record service of 55 years, the board reluctantly acceded to his request. On his retirement a resolution was passed recording appreciation of the very distinguished services rendered to the bank by Sir Henry, and expressing the hope that he might long be spared to enjoy his well-earned leisure. To mark its appreciation in a tangible form, the board made Sir Henry a very substantial retiring allowance. I am sure that grant will meet with your cordial approval. As successor to Sir Henry Buckleton the board appointed Mr F. W. Dawson, who has filled with distinction many high offices in our service. We are satisfied that he will worthily uphold the high traditions of his predecessors. The Banking Position.

I shall now briefly review the banking position in the Dominion. The banking returns for the March quarter of all banks operating in New Zealand revealed an increase in the free deposits or current account balances of more than £4,000,000 for the year, bringing the total to over £21,000,000. The time or fixed deposits have continued to expand, which is inevitable in a period of commercial depression. The free and fixed deposits for the past five years disclose the following movements:—

The total of the deposits shows an abnormal increase. On the other hand, the advances and discounts have decreased for the year by nearly £7,000,000, leaving the exceptionally large excess qf deposits over advances of more than £19,000,000. The figures are as follows:—

♦ Excess of Advances. The decline of bank advances by approximately £7,000,000, as compared with last year, has been materially contributed to by the raising of the exchange rate on London from 10 per cent, to 25 per cent. Items From Balance-sheet. Before formally moving the adoption of the report and balance-sheet, I shall take the opportunity of commenting on any items which call for special mention. Capital and Reserve Fund.—These remain the same as last year. On July 19 next, the 4 per cent. Guaranteed Stock, amounting to £529,988 10/6 will fall due and will be repaid by the bank from its London resources. Notes in Circulation.—A decrease of £79,598 is shown. The weekly average of the circulation for the year was £3,735,000. Deposits.—These have increased by £1,754,765. The greater portion of the increase is in fixed deposits. Government balances are less by £593,609. The deposits of all the banks have shown a considerable increase during the year, and reference to this matter is made in another part of my report. Profit and Loss.—There is a decrease of £21,238. Coin, Cash Balances and Deposits with Bankers.—This item shows a decrease of £706,136. Money at Call and Short Notice, Government Securties, and Other Securities in London, have decreased by £2,103,050. Bills receivable in London and in Transit. —This item shows an increase of £852,359, due mainly to the higher prices obtained for wool during the past season. New Zealand Government securities held in the Dominion and Australia, show an increase of £5,261,386, due mainly to an increased holding of Treasury Bills. Australian Government Securities show an increase of £970,481. Advances and Bills Discounted are less by £2,709,527, but it should be mentioned that loans to the State against Discharged Soldiers’ Settlement Mortgages are included under this heading, otherwise a much greater reduction would be shown. The dividend on all classes of shares will be payable in Wellington to-mor-row, and at our various branches on receipt of advice. The Dividend. I quite anticipate that those not directly interested in the welfare of the bank may question the policy of the board in deciding to recommend the payment of a final dividend of 5 per cent., making 10 per cent, for the past financial year. I would, however, point out that this dividend has been earned on capital, plus reserves, the latter being created in prosperous times. It is sometimes overlooked that a considerable number of our shareholders have paid a substantial premium in recent years for their holdings, and on a dividend of 10 per cent, they are getting not more than from 3 to 4 per cent, on their investment. Indeed, on present quotations, viz., £2 12/- cum dividend, the yield is just about £3.84 per cent. The term of office of Mr R. W. Gibbs, one of the two representatives of the ordinary shareholders, expired in March last, and he was re-elected unopposed to the position. The term of office of Sir George Elliot and Sir Robert Anderson expired in March last, and both have been reappointed by the Government for a further period of three years from March 31, 1934. In July of last year, fixed deposit rates were again reduced. Current rates are:—

Per cent. 3 months 2 6 months 2| 12 months 2f 24 months 3 The minimum rate for overdrafts on first-class business is 5 per cent. It

has to be borne in mind that in fixing overdraft rates, consideration has to be given to the rates being paid on fixed deposits (at the present time 4 per cent, deposits are still running), and also to the fact that banks are taxed not on profits, but on an assumed income arrived at by taking 30/- per cent., of their total assets and liabilities in New Zealand. At the present rate of income-tax, this is equal to a tax of 8/9 on every £lOO of deposits and advances. Oversea Trade. The oversea trade of the Dominion for the year ended March 31 last, expressed in sterling, shows that the value of our exports increased by approximately £4,157,000 compared with last year, and imports decreased by £1,141,000. The following table, in which the figures for five years are given, is interesting:—

In the year just ended, the exports exceeded the imports by the very large sum of £15,926,000 sterling, or, if expressed in New Zealand currency, £19,907,000, and it is somewhat singular that this latter amount should so closely approximate to the excess of deposits and over advances—£l9,s37,000—as shown in the banking returns for the past quarter. Thanks to Directors.

Mr A. E. Mabin moved a vote of thanks to the directors and the general manager and staff' for their services during the year. He made reference to the retirement of Sir Henry Buckleton and paid a tribute to his long, earnest and unselfish devotion to the bank’s interests and said they felt satisfied he had left the ship in a sound condition and in good hands. He congratulated Mr Dawson on his wellearned promotion to the general managership and his capacity to bear responsibility on his shoulders. He also congratulated Sir Robert Anderson on the honour conferred upon him by the King. Mr W. Appleton seconded and the motion was carried with acclamation. The chairman and Mr Dawson replied. Mr Dawson including in his remarks a reference to the very difficult time experienced by country branch managers during the past few years. . .

March Free Fixed Total Quarter. Deposits. Deposits. Deposits. £ £ £ 1930 23,905,822 30,097,419 54,003,241 1931 18,329,853 32,922,086 51,251,939 1932 16,998,822 34,466,289 51,465,111 1933 17,461.282 35,208,988 52,670,270 1934 21,657,550 39,455,883 61,113,433

March Excess of Quarter. Deposits. Advances. Deposits. £ £ £ 1930 54,003,241 53,676,779 326,462 1931 51,251,939 54,332,234 3,080,295* 1932 51,465,111 50,232,337 1,232,774 1933 52,670,270 48,500,274 4,169,996 1934 61,113,433 41,575,526 19,537,907

Year to Excess of March 31. Exports. Imports. Exports. £ £ £ 1930 47,933,000 49,085.000 1,152,000* 1931 37,198,000 37,656,000 458,000* 1932 30,857.000 22,510.000 8.347,000 1933 32,677,000 22,049,000 10,628.000 1934 36,834.000 ♦ Excess 20,908,000 of Imports. 15,926,000