RECORD ADVANCES

Wanganui Chronicle, Volume 83, Issue 27, 3 February 1939, Page 11

RECORD ADVANCES

COMMONWEALTH BANKS ASSISTANCE TO INDUSTRY A marked expansion occurred in banking business in Australia la a l year. Total advances o£ the tradingbanks for the December quarter reached a record of £291,000,00(1, an increase of £17,000,000 on the year. Deposits rose by £4,000,000 to £318,000,000. Compared with the September quarter, advances rose by £2,000,000, and deposits by £6,000,000. The continued rise in advances has been a feature of banking returns in recent years, states the Courier-Mail. Brisbane. The banks have contributed largely to the improvement in trade conditions in Australia, supporting a higher level of business activity. There was some evidence of a restriction in lending toward the end of last year, but apparently the banks have not carried this policy to the point of damping-down business expansion. Finance for importing and for industrial needs may not be so necessary in the near future, but rural borrowers may require further accommodation, due to the prolonged drought in many pastoral areas. The rise of £6,000,000 in deposits between September and December quarters is largely seasonal, due to the expansion o£ export income. The increase of £4,000,000 in deposits over the year is gratifying in view of the lower prices for export commodities. A rise in deposits in proportion to advances could hardly be expected last year. Over the year the percentage of advances to deposits increased from 87.3 per cent, to 91.6 per cent. The cash position o£ the banks is not as strong as it was a year ago, but there was a definite improvement in the last quarter of 1938. The ratio of cash to deposits fell from 12.25 per cent, for December, 1937, to 11.04 pci cent, for December, 1938. This compares with 10.5 per cent, for September, 1938.