BANK SUSPENDS PAYMENT

Taranaki Daily News, 25 August 1931, Page 9

BANK SUSPENDS PAYMENT

PRODUCERS’ INSTITUTION DIFFICULTIES IN AUSTRALIA DEPOSITORS MAY NOT LOSE PROSPECT OF LIQUIDATION By Telegraph—Press Assn.—Copyright. Rec. 12.35 a.m. Sydney, Aug. 24. The Primary Producers’ Bank of Australia, Limited, with headquarters at Sydney and branches in other States, suspended payment as from to-day. Shareholders are to be recommended to place the bank in voluntary liquidation. The chairman of directors, Mr. H. Schweiger, announced to-night that if the bank’s securities realised anything like the bank’s valuation every depositor should ultimately receive 20s in the £l.

The bank, which was established in 1923, encountered unprecedented difficulties, accentuated by the pronounced fall in the values of wheat and other primary produce, a marked reduction in security values such as country lands, the necessity of maintaining advances to farmers coupled with steadily declining deposits, the lack of adequate capital, and the inability to obtain temporary accommodation or to amalgamate with any other financial institution, while most of the bank’s clients were unable to reduce their indebtedness in the slightest degree. There was no alternative, added Mr. Schweiger, but to cluse the bank’s doors.

The bank’s paid-up capital was £439,401. Deposits at the latest balancesheet (February) amounted to £1,483,845. Assets totalled £2,102,443, of which bills, discounted loans advances, and other assets accounted for £1,592,318. •The bank held £376,086 in liquid assets, including £37,890 in cash, £92,000 at short call, and £145,678 in Commonwealth bonds.

Mr. Schweiger added that his band had been seriously prejudiced by the closing of the New South Wales State Savings Bank.