BANK RETURNS.

Star (Christchurch), Volume LXVI, Issue 20276, 10 April 1934, Page 4

BANK RETURNS.

Conditions Considerably Accentuated. SURPLUS OF DEPOSITS. (Special to the “ Star.”) WELLINGTON, April 9. The returns of the six trading banks for the March quarter disclose an accentuation of the conditions displayed in the December quarter, in that deposits have increased still further, while advances exhibit a continued decline. This results in an exceptionally heavy sttrplus of deposits over advances. The figures under review are the averages for the quarter, and, as the movements are progressive, the situation is more accentuated at the end of the quarter than the average shows. The monthly Abstract of Statistics gives the actual position as at March 12, when deposits had reached a total of £62,016,036, easily the highest ever recorded, while advances had fallen to £41,143,098, which is the lowest point since 1920. This leaves an excess of deposits of £20,872,938, which is over £1,000,000 more than the previous record of £19,808,512 in June. 1920. This position is brought about chiefly by the good returns received for our exports, principally in the higher wool prices, and by continued restriction in importation. As far as can be judged at present the June quarter will show a continuation of existing conditions, as exports are still going forward freely and in good volume, while there does not appear to be much tendency to increase imports while the exchange rate remains at the present high level. Free deposits have increased by £3,035,217 in the quarter, while fixed show a slight decline of £62,770. Note circulation is a little lighter, the December quarter being heavy on account of the holiday spending. Discounts have increased and show a heavier total than usual for this time of the year, but advances exhibit a reduction of £2,453,841, due largely to the good receipts from the wool sales. The holdings of Government securities, largely Treasury bills for exchange purchased, show a furthei heavy increase, and have reached an exceptionally high total. The banks have somewhat too large an amount bearing interest, in view of the comparatively restricted outlet for advances, as shown in the following table: March Advances. Discounts. Total qr. £ £ £ 1934 40,311,423 1,264,103 41,575,526 1933 47,934,828 565,446 48,500,274 1932 49,519,631 712,706 50,323,337 1931 53,264,390 1,067,844 54,332,234 1930 52,447,136 1,229,643 53,676,779 The returns generally are a reflection of the conditions prevailing. There is plenty of money available, but a lack of suitable outlet for investment, and some lack of confidence in investment and enterprise at present. Also, as long as the exchange remains at the present high level, importers will restrict their purchases to the bare minimum for present requirements, in addition to which there must be very large sums remaining on deposit which would be remitted to London if the exchange were at a normal level.