THE BANK OF NEW ZEALAND

Wanganui Chronicle, Volume 74, Issue 147, 24 June 1931, Page 6

THE BANK OF NEW ZEALAND

T'HE operations of the Bank of New Zealand are of greater interest to the general public than the doings of any other commercial concern, firstly because the State is a partner in this institution, and secondly because the bank itself transacts nearly fifty per cent, of the banking business of the Dominion. The success of this institution therefore is both a barometer and a blessing. A perusal of the balance-sheet of the Bank of New Zealand reveals that bad times do not suit a banking institution any more than they do any other trading concern. It is an erroneous idea that a banker makes profits both in prosperity and in adversity. In times of high interest rates, there is a restriction of business to conserve the available credit, and despite banking deposits and advances being higher than usual, this-is not the only factor in banking business, and it causes no surprise that the bank s profit for the year decreased by £162,720 to £854,814. This decline is ascribed to increased taxation, to higher cost of deposits, increase in bad debts, and to lessening earnings on short term investments in London. The bank has been caught by high interest rates in the Dominion and low interest rates in England. Deposits while n'ot in use have, of course, to receive interest, thus the high bank rate is of no help to the banking institution, while low interest returns on short loans in London makes less the remuneration derived from the temporary investment of unemployed funds in London. That the bank has had a relatively successful year is pleasing indeed, not only because of the benefit reaped by the shareholders and the Government —the State derives no less a sum than £594.263 in dividends and taxation from the Bank of NewZealand—but also because it proves that the banking structure of the Dominion is being conducted upon sound lines. The success of this semi-publie institution, therefore, is perhaps one of the best advertisements that New Zealand can provide Io I he financial world. A handy asset indeed.