BANK OF NEW ZEALAND.

Timaru Herald, Volume XCVIII, Issue 18084, 21 June 1924, Page 4

BANK OF NEW ZEALAND.

... MEETING OF PROPRIETORS. •

1 ' (Special to the “Herald.”) j ; WELLINGTON, June 2U. h The annual meeting of proprietors* lot the iiank'-ol' New Zealand was held tjhjis morning when, in the absence of Sir George' Elliot, the Actmg-Cnairman of Directors (Mr William Watson) piesided over a fair attendance. I In moving the adoption of the annual I report and balance, sheet, Mr Watsop ! said that the ’ Bank’s capital, ites- ! serve f Eund, and' undivided profits, : as • recommended, in the directors' report would stand as follows: Pieleience Capital held by the Government of New Zealand, £1,500,000; ordinary share capital, £3,000,000; reserve fund £2,325,000; undivided profits, £oUb,513; a total of £7,331,513. In addition, there was the 4 per cent, stock guaranteed by .the government of New Zealand, amounting to £529,988, and due in 1934, which ranked for repaynient 1 subsequent to the liabilities oi the Bank to depositors and other creditors.- These ‘hinds aggregating £7,851,501, were, equal to over 20 per "cent, of the Bank’s liabilities to the, public. But these figures did not alone indicate the full strength of the Bank’s position, for like all banking i institutions of TLrst-class standing, it had 'for uiany years-been-accumulating : internal reserves to provide for the , effects of - any exceptional set-back , which might overtake the Dominion; j • As this country \yas dependent for its i welfare on the conditionsof overseas | markets the course ’of which The ; Bank- was powerless to shape—these large internal reserves against unfor- , seen contingencies were essential to the maintenance of the credit ot the Bank and the country. _ 1 “During the year,” Mr Watson continued, “the note circulation averaged about ? £3,920,009, the highest figure 'reached bfeing £4,886,668 and the fow"est £3,655,870. whilst the legal right of issue was about £10,500,000. ihe Bank Had, therefore, an ample margin .6f currency, available to meet tne ordinary requirements of the customers and to provide a substantial reserve fpr emergenoy. The, com held by the six banks doing business in New Zealand had, for the past eight years, ranged between £7,000,000 and, £8,u00,000 and had forthepastyear, been something more than £7,800,000. The securities held m New Zealand amounted to about £5,000,000. Deposits at the. balance date amounted to £30,501;719.' When compared with the figdrea .of,-the -previous year, these showed an increase of £49/,793. ine deposits included' those held on Government Account, in which there were sometimes very large fluctuations, it happened, that the Government balance on March 31/ 1924, was nearly £1,800,000 less than/ on the corresponding date in 1923, so that the deposits held on account of other had really increased during the year under review' ‘b;y more than £2,200,000. Ihq reduction^’for the -year of £879,388 to. bills payable and . other liabilities did not ’call 'for special comment. It would be observed that for the lull year it was proposed to bute in dividends £487,307 Is 3d. Under the provisions of the .Bank- of New Zealand Act, 1920,” this amount fell to be allocated as follows Ten per cent, on Breierence “A” Capital,: iOU,UUU; 1-7 of £306,250, on Preference “B” Capital, £43,750; pirns 1-3 on the < prohts for distribution in excess of £356,250, '£43,685 13s 9d; and on Ordinal, Capital,6-/tbs ot £3Ub,. 200 £262,500; and 2-3rds of £131,057' is 3d/ £87,371 7s 6d; a grand total of £487,307 Is -3d.- On Ordinary bhares this worked -• out at the rate of Bliiiiings nad -bightpence per share on-| the CapiM/' as' at April 1, 1923; one, shilling and fourpence per share un the new capital paid up as at October T tasc; ana two pence per share on the 2205, shares paid up as at March-j 8 * “Cash, balances at bankers,” Mr | Watson explained, “showed that Government and municipal securities, and otner readily realisable assets, apart from ordinary advances to customers, equalled rather more than 70 per cent, of the Bank’s liabilities. Tms position- must be gratifying, not only to depositors, but also to borrowing customers, denoting as it did tne ability to withstand any stringent monetary conditions whicli might arise, without the necessity for caning' in advances. As compared with two years ago, tnero was an increase of £1,648,000 in the Bank’s investments m securities of the Commonwealth and of the various States of Australia. The greater por tion of the amount was in compara. , tively short dated stock, falling due at suitable dates. The balance of ti ade between Australia and New Zealand had for some years been heavily, against the Dominion, consequently the Bank had to pay out very large sums in the Commonwealth. Often it was difficult and expensive to provide the' necessary funds in Australia; theretore it was prudent to hold investments, which, in an emergency, might ■be realised; and, apart from the advantages for exchange purpose? of these investments they were quite profitable. The advisability of holding a large amount of first-class and readily realisable investments in London and Australia was obvious. If, in a time of stress, it became necessary to sell in New Zealand a large amount of New Zepland Government securities,, which were domiciled in the Do; minion, the effect would be to deplete deposits, because, for the most part, the purchasers would require to draw on their balances at their banker. Having regard to the proportion the Bank’s deposits bore to those of the other Banks, the net gain in its resources would probably be only about 55 per cent, of the proceeds of sales. Then, too, it would be difficult to realise in New Zealand any largo amount of even first-class securities without demoralising the limited market. On the other hand, sales in London and Australia meant that the resources would be benefited to the extent of the full

proceeds of the sales. The Bank s in- | J .vestments in Australian Government securities and in New Zealand municii pal securities during the last twelve j months, accounted for the deduction in | | cash items. , j | “The ordinary operation of the , i Bank,” the chairman went on to say, “for the year resulted in a profit of £735,831, an increase of £182,194, as compared with the preceding year, but of course, we had the use of. practi ; cally the whole of the new capital since October last, and in addition, our j resources have been fully and profitably | employed. Further, less provision tor j. , bad debts and doubtful debts was reI quired. During the year we decided to realise portioii of our holding of BriI tish Government securities and tore'.invest the proceeds in other Britismj Government stocks, maturing on more | suitable dates. The transactions re- ’ suited in a surplus of £148,112 over the book values of the stocks sold, anq I it is proposed to transfer this surplus I to the Reserve Fund. We have also /been able to take into profit the sum of £184,465 which has been allocated from the profits of previous years, as provision against possible loss on certain doubtful advances. These Particular advances have either been repaid or placed on a quite satisfactory tooti?ng If is also proposed to transfer thfs amount to . the Reserve Fund; Adding the amount of our internal leI serves S to the Capital, Reserve 1 und, I and undivided profits, the earning 0 .the Band do not represent a lugh ; pei--1 centage on all these funds, although , substantial on the Capital itself. In j (December last we paid out the full) ' year’s dividend of £5^ o nnr) „ nf j h ® | Preference “A shares, £50,000, and a, I half-year’s dividend on- PrefeJ.-ehce i “B” shares, £25,000; and on | shares, £150,000. .The ba ance of the ! year’s dividend will be paid at vyei i fington to-morrow and at branches on i receipt of advice. The advances toj> | customers amount to £18,787,100 a 13°$? XSt‘ fi,oWoo. . i»tte lit he mentioned that, m view of the rSnt increase in the Bank’s capital, ■applications for advances were encouraged and the. effectofttas is seen in the figures just quoted. ur course, advances are constantly, being reDaid or reduced and new additional advances being made. Ample provision has been made for all bad and doubtwent on to deal with other topTcs of the day, his remarks being reported elsewhere. The report and balance sheet weie Reece, in seconding the j motion, said that land values wm one I of the most important things affecting the country at the present tune, lie . did not see how farmers could. bftd?49|- 1 perous'until fhevaSwas .some, readjust-,. ment. Surely the real value of the land must be its earning, power. fie congratulated the shareholders on be-, ing partners in" an institution whten had practically & passqd;, unscathed j through the World War.- ■ Mr Gibbs returned thanks for his election as a director. : ! Mr Shader Weston moved a vote , of* thanks to the . directors, general manager and staff; - * ■ ■j, •' This was carried by. acclamation. Mr Buckleton said he greatly appreciated the recognition of the staffs efforts. A resolution of appreciation of the services of Mr Upton (retiring director), was parsed, ■-'•■Mr A. R W. 1\ Green was appointed chief auditor.