YEAR’S GAIN ON DEPOSITS

Taranaki Daily News, 14 October 1929, Page 7

YEAR’S GAIN ON DEPOSITS

EXPANSION IN ADVANCES EXCESS REDUCED TO £5,000,000. ' . QUARTERLY BANK STATEMENTS 1 ' ' ' i . Wellington,. Oct. 10. The notable features, of the bank , statements for the September quarter, in comparison with those. for the third quarter of last year, are a substantial increase in deposits, mainly in the fixed class, and a much greater increase in advances, with the result that the ex? cess of private deposits over advances has been reduced from £7,476,504 to £5,030,634. Both deposits and advances are at record figures for the September quarter. It is noteworthy that as compared with the June returns, deposits are lower by £2,483,268, while advances have increased by £2,130,781. The second quarter showed the post-war record ex- ; cess of deposits, £9,644,683. . Details cf the three classes of deposits for the September quarter of this and last-year are:— ■ ; _

Totals £54,224,705 £57,367,766 £3,143,061 The gain in the demand. deposits is normal, but the increase in the time deposits is most marked.' Dealing with the free deposits held by the several banks as compared, with the September quarter of last year, it - is noted that all except the Commercial Bank show increases; There was also : a rather large increase in fixed deposits, in which all the banks shared except the Union Bank. '» Details are:— FREE DEPOSITS.

The aggregates, of the free and-., the. fixed deposits are the highest in any. September quarter in the last five.'years,as appears from the following * sum-, mary:— ' , Sept.

The big increase in the fixed deposits may revive discussion of “idle money.” As Professor Gustav Cassel has recently observed, however, the view that such. money will lie idle pending its definite employment' by its owner is entirely erroneous, since the bank uses it to increase its own assets, whether in the form of loans or securities. The advances show an increase of over £4,500,006, in some part due to the increase in, imports. AH the banks shared in the increase, as shown below:— i. ■'

The discounts have fallen bv £177,582. from £1,171,970 to £994,388. The discounts and advances together amount to £49,537,992,.which falls short of the aggregate of the free and fixed deposits by £5,030,634. The banks were overloaded with funds a year ago, but this year they have managed to find investment with the public for a great deal more of their funds. Taking the September quarter of each of the last five years the excess of deposits over advances is. disclosed in the table below: —

While the deposits have increased by £1,972,'608, as compared with a year ago, the advances and discounts together have expanded by £4,418,568. The note circulation shows a slight increase as compared with the corresponding quarter of last year, but coin and bullion have contracted. The latter cover the note circulation with a million to spare, the average circulation having been £6,272,353, as against £6,166,287 last year, while the metal reserve has declined from £7,350,045 to £7,109,873.

Sept. 1028. Sept. 1929 Increase. Govt. . £1,628,687 £2,799,140. £1,170,453 Free . 23 >3'44,951 23,968,295 623,341 Fixed . 29,251,064 30,600,33'1 . 1,349,267

;Bank Sept. 1928 ■ Sept. 1929 - Increase N? Zealand £ 19,903,927 £11,284,524 £380,597 Union .... 2,565,702 ■ 2,642,046 76,344 N.S. Wales 2,528,196 2,598,544 70,348 Australasia 2,268,199 2,313,767 z 45,658 National . 4,060,371 4'121,387 60,016 Commercial 1,018,649 1,008,027 *10,622 Totals . £23,344,954 £23,968,295 FIXED DEPOSITS. £623,341 Bank Sept. 1928 Sept. 1929 Increase N. Zealand £14,272,305 £15,224,528 £952,223 Union ...". 3,355,633 3,286,103 *69,530 N. S. Wales 3,864,939 4,072,196 207,257 Australasia, 2,663,768 2,822,955 1’59,1'87 National . 4,472,080 4,51'8,422 46,342 Commercial 622,339 676,127 53,788 Totals .. £2'9,251,064 30,600,331 1,349,267

Quarter Free Fixed Totals 1925 £26,811,762 £20,941,663 £47,753,425 1926 24,907,961 ‘21,074,892 45,982,853 1927 21,815,504 23,3'98,246 : 45,213,750 1928 23,344,954 29,251,064, 52,596,018 1929 23,968,295 . 30,600,331 54,568,626

Bank Sept. 1928 Sept 1929 Increase N Zealand £ 18,696,372 £20,73'8,919 £ 2,042,547 ■ Union . ' 5,106,0318 5,762,166 656,128 N. S.. Wales 5,622,807 5,903,411 280,604 Australasia 4,664,590 4,975,432 310,842 National 8,435,788 9,519,940 1,084,152 Commercial 1,421,859 1,643,736 221,877 Totals £43,947,454 £48,54'3,604 £4,596,150

September Quarter Deposits. Advances. Excess 1'925 £ 4'7,753,425 £ 44,975,360 £2,778,065 1926 45,982,853 418,323,946 •2,341,093 1927 . 48,815,231 ♦3,601,481 1*9218 52,596,016 45,119,424 7,476,594 1929 54,568,626 ♦Excess 49,5'37,992 of advances. 5,030,634