SYDNEY BANK CLOSES

Star (Christchurch), Volume XLIV, Issue 201, 25 August 1931, Page 1

SYDNEY BANK CLOSES

Payments are Suspended by Institution. NO OTHER ALTERNATIVE. United Press Assn.—By Electric Telegraph—Copyright. SYDNEY, August 25. The Primary Producers’ Bank of Australia, Limited, with headquarters in Sydney and branches in the other States, suspended payment as from today. The shareholders are recommended to place the bank in voluntary liquidation. The chairman of directors, Mr H. Schwieger. announced to-nighr. that if the bank’s securities realised anything like the bank’s valuation the whole of the depositors should ultimately receive twenty shillings in the pound. The bank, which was established in 1923, encountered unprecedented difficulties, accentuated by the pronounced fall in the values of wheat and other primary produce, the marked reduction in security values, such as country lands, and the necessity for maintaining advances to farmers coupled with steadily declining deposits, lack of adequate capital and inability to obtain temporary accommodation or to amalgamate with any other financial institution. At the same time most of the bank’s clients were unable to reduce their indebtedness in the slightest degree. There was no alternative, added Mr Schwieger, but to close the bank’s doors.

The bank’s paid-up capital is £439,402. Deposits at the last balance-sheet in February amounted to £1,483,845, and the assets totalled £2,102,443, whereof 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.

At the annual meeting of shareholders of the Primary Producers’ Bank of Australia Ltd. last month, the chairman of directors (Mr Henry Schwieger) said that the figures of the balancesheet reflected the adverse financial conditions. The subscribed capital was £2,463.082 and the paid-up capital showed, at £439,402, a small increase for the year. The directors had given serious attention to the necessity for securing further capital, without which, he said, the bank’s progress must, of necessity, be exceedingly slow. The premium reserve fund stood at £61,706, and the general reserve fund at £20,000. Customers’ deposits totalled £1,483,845, a reduction of £411,882 compared with the previous year. Bills payable and other liabilities, at £48,006, showed an increase of £3621. The balance owing to , the Colonial Mutual Life Assurance Society was £40,000, a reduction of £SOOO from the previous year.

On the assets side Commonwealth notes and coin, together with balances due by other banks, totalled £125,782, a reduction of £2417 on the previous year. Short call moneys totalled £92,000 — £IOO,OOO less than a year ago. Commonwealth Treasury bonds totalled £145,678 (£213,344 a year ago), bills receivable and remittances in transit £12,626 (£59,800), bills discounted, loans, advances and other assets £1,592,318 (£1,804,558), The total liquid assets, £376,087, represented 24.5 per cent of the total liabilities to the public. The profit for the year was shown at £990, as compared with £2828 the previous year.