THE NATIONAL BANK.

Taranaki Daily News, 3 September 1929, Page 13

THE NATIONAL BANK.

FEATURE OF BALANCE-SHEET

AN INTERESTING REVIEW 7 . CONDITIONS IN DOMINION. The fifty-seventh ordinary general meeting of the National Bank of New Zealand was held in London last month, the Hon. AV. Pember Reeves presiding. In moving the adoption of the report and balance-sheet, Mr. Reeves said. “Our paid-up capital remains unchanged at £2,000,000, and our reserve fund stands at the same figure. Our reserve fund is entirely invested in British Treasury Bonds and Dominion Government. securities, Noto circulation shows a slight increase of £124,000. The average circulation of all tho banks in New Zealand during the year 373,000, and they had the right of issue up to £12,190,000. Deposit and current accounts are reduced from £12,088,000 to £10,567,000, a difference of about £l,500,000. As a matter of policy, wc decided to pay off a largo proportion of our long-dated deposits in London rather than continue them at high rates of interest. On the other hand, bills payable and other liabilities are increased •by £1,234,000. THE ASSETS. ‘•’On tho assets side of the balancesheet, coin and bullion and money at call are down by £900,000, due partly to the reduction of liabilities under deposits, and partly to the earlier return of funds to New Zealand. Coin, at £851,000, shows a decrease on last year’s figures of £lOO,OOO. This is accounted for by the increase of the same amount in our investments, which now stand at £2,230,000. We thought this a profitable exchange, as our coin reserves in tho Dominion were high enough for all practical purposes. Bills receivable and discounted show a net decrease of £740,000, whilst advances on securities and current accounts are increased by £1,150,000, and now stand at £10,352,000, as compared with £9,212,000 a year ago. We are satisfied that these are well-spread. Tho average percentage of our advances to deposits over the last five years has been just over 89 per cent. Landed property and premises stand at £600,000 at March 31 this year, as compared with £572,000 in 1928. ALLOCATION OF PROFIT.

“The net profit after paying a bonus to the staff of £ll,BOO, is £290,600, which shows a small increase of some £BOO. The sum of £lO,OOO has been placed to premises, and £ll,OOO allocated to pension and gratuity funds. The same dividend and bonus as last year have been paid, and the amount carried forward, £155,000, is considerably more than six months’ dividend and bonus. Expenses of management and charges at head office and 94 branches and agencies, are practically tho same as last year. "By the end of the current year, the Bank will have overtaken the arrears in its general building programme. It has taken us ten years to do this, and the expenditure has been heavy, but it has been necessary.” FAR JUNG YEAR. “The dairy year has been satisfactory. There is no doubt that the increase in output of dairy produce has been largely duo to the greater use of fertiliser, chiefly superphosphate and lime. The imports of these have trebled in the last six years, and, fortunately for the farmers, the price has fallen considerably. “Turning to wool, the total value of our export which I just gave you shows a decrease of about £1,100,000, due chiefly to a decrease in the amount shipped. The number of sheep in the Dominion is still mounting; indeed, this year the increase is very large, amounting to nearly 2,000,000. The total number now slightly exceeds 29,000,000, and is easily a record for the Dominion. The increase has been faster this year in the North Island than in the South, and the flocks in the former are now rather more than •2,000.000 larger than those in the lat-

ter. It is quite evident that woolgrowers, encouraged by the good prices for wool, are keeping their breeding ewes, so that another increase may be hoped for in tho current year, “Further evidence of this is shown by the figures of the frozen meat export. Of these, the figures under head of lainb show an increase of £217,000 only, while mutton shows a small decrease. The figures for lamb are £6,712,000 this year, as compared with £6,495,000 in 1928, and £1,909,000 this year, as compared with £2.071,000 in 1928 for mutton. On the other hand, beef, which last year showed a large relative increase, has again risen. This year the export stands at £883,000, against £478,000 foi’ two years ago. “The estimated returns for wheat and barley this year are lower than last year, as wheat is expected to average 33. bushels an acre, against 36% yielded last year, and barley to show a rather larger decrease. The total acreage of all crops in New Zealand is only about 1,750,000 acres, which looks small alongside the large pastures of the islands.

“Of tho smaller branches of production, fruitgrowing continues to make progress; the export of apples last year was valued at nearly £500,000. New Zealand hemp is. still depressed by low prices. The growth of tobacco continues to make quiet headway. The growers and millers of native flax are meeting their troubles by improving the quality of the plant and by the experimental

use of it in the timber trade. Little or nothing is known in England of the secondary industries of New Zealand. Nevertheless, they are by no means negligible. Their annual output is now valued at £83,000,000, and on the whole their condition is satisfactory. NEW ZEALAND LOANS. “During the financial year ending with March last the Government has floated two loans, one of £5,000,000 in May, 1928, and one of £7,000,000 in January of this year. Both were completely successful, the second loan especially so, as the rate on it was several shillings cheaper than on tho first loan.” BANKS AND THE PUBLIC. Mr. Reeves made a brief reference to the projected new banks, and stated that the six banks now working in New Zealand have 560 branches and agencies open to customers for business. There was, therefore, one banking office to about every 2600 of the population. The banks have lent the public £-17.000,000—a tidy sum for a population of 1,500,0’00. If more were fairly required, they would lend it. “I would, however, point out,” said Mr. Reeves, “that so far from being niggardly towards tho public, the banks lend a much higher proportion of their deposits than English bankers would dream of doing. Nevertheless, if I may judge from what I read and hear, they are’criticised for not lending enough. The truth is that there is a confusion between banking and mortgage loans. To suggest that because banks do not lend up to the last penny of their deposits they are keeping millions of money idle which might go to develop the country is not only wrong but really dangerous talk. It has been our settled policy to help primary producers in New Zealand in every legitimate way.” TRIBUTE TO LATE MANAGER. After referring to the death of Mr. Robert Logan, for many years a director of the bank and a former chairman, Mr. Reeves paid a high tribute to the late Mr. G. W. Mclntosh, the general manager, whose unexpected death in November occurred within a few weeks of the date fixed for his retirement and stated;—

"Some months before Mr. Mclntosh’s death occurred his successor had been selected —Mr. J. T. Grose, an Australian banker of much experience, who had for some time held the post of senior inspector for New Zealand in the service of the Bank of New South Wales.”

Interesting features in connection with the bank’s balance-sheet are: Shareholders’ funds, including balance carried forward, equal 22 per cent, of the bank’s total assets; the amount of liabilities to the public for every £1 of shareholders’ funds is £3 9s 9d; the 14 per cent, dividend paid equals £6 14s 9d per cent, on shareholders’ funds employed during the year, and approximately £5 0s lOd per cent, on the market price of the shares; the liquid assets are equivalent to 45 per cent., or 9s in the £1 of the total liabilities to the public.