BANK OF NEW ZEALAND

Waikato Times, Volume 124, Issue 20832, 16 June 1939, Page 10

BANK OF NEW ZEALAND

REVIEW OF PAST YEARS FEATURES OF BALANCE-SHEET EFFECT OF ECONOMIC POLICY j (Special to Times.) WELLINGTON, Friday. Features of the balance-sheet of the Bank of New Zealand were reviewed by the chairman, Mr A. T. | Donnelly, at the annual meeting to- | day. He said: — Long-term mortgage debenture ! stock is £607,050. Of this stock, ] £107,050, issued in New Zealand, will j fall due on August 1 next and will be j repaid. The balance of £500,000 was 1 issued in London and is repayable on I November 15. 1940. Deposits, £33,328,478, are less by | £1,403,054 than the figures of a year I ago. Though free deposits are some- \ what higher, the fixed deposits show 1 a further decrease. ] Bills payable and other liabilities . are more by £665,970. Coin, Reserve j Bank notes, and deposits with bank- | ers stand at £7,677,918, being an increase of £1,574,339 compared with last year. Money at call and short notice, Government securities ami other securities in London, £4,391,263, are less by £1,163,255 than last year. It has been necessary to make further sales of British Government securities during the year to replenish our cash funds. New Zealand Government securities. £5,540,847, show an increase of £150.500. Australian Government, securities, £488,075, represent a reduction of £1,751,559, compared with the figures of a year ago. The heavy drain on overseas funds during the year necessitated further sales of Commonwealth stock. Advances and bills discounted, £27,202,739. are higher by £785,417. This increase indicates that the demand for bank accommodation continues. We have considered it prudent to conserve our resources to meet the legitimate demands of our farming and trading customers, and have adopted a somewhat restrictive policy in regard lo applications for advances for other purposes. Banking Figures The aggregate deposits and advances of the six trading banks for the years 1935-1939 are shown in the : following table :

March. In these five years, deposits have J Increased by £5.1 millions, advances ! by £9.6 millions, and the ratio of advances to deposits by 8.7 per cent. In the case of deposits, the steady an- j nual increase stopped in 1938. In that | year increases continued until April:; but between May and November the fall amounted to £5.3 millions, while j from December, 1938 to March. 1939.! practically the whole of these deposits was restored. These rapid movements in aggre- ! gate deposits in the past year are j rather unusual and demand consideration. They are necessarily linked up with the Dominion's overseas funds and with her overseas balance of trade. It can reasonably he assumed that the temporary decline in deposits was associated with a free market for merchandise imports and a free market for capital export, while the restoration was associated with import; and exchange control introduced on December 5, 1938. Effect on Deposits Adequate policies of import and ex- ' change control have a definite effect on trading bank deposits, to the extent that they retain more money in New Zealand and limit overseas expenditure and investment. This, in turn, has a bearing on the possibilities of additional advances for purposes other than Importation, although in this rc- | sped the position of New Zealand's { overseas funds is at present more iin- | portant. I Deposits and advances of the Bank

It will be seen that deposits have \ varied little in the past five years, j while advances have increased by £5 j millions, and the ratio of advances to deposits has risen by 17.0 per cent. 1 Although our annual figures of deposits show only slight variations, the bank experienced the same quick decline during May to November, 1938, and the subsequent recovery in the succeeding four months. Trade Figures The value of the Dominion's total external trade for the year ended March 31 last in New Zealand currency was £112,275,000, a reduction of £10,797,000 on the figures of the previous year. Exports were less by 11 per cent, mainly due to lower prices, but also to a reduced quantity. Imports were 6.3 per cent lower in value than the previous year. The figures for the past five years were:— ended

Although exports show a reduction compared with the previous year, which was a record year, it is interesting to note that on only one other occasion in the history of tiie Dominion have they been exceeded —in the 193637 year.

AVERAGE OF MONTHLY FIGURES: £ (N.Z.) MILLIONS. Ratio of Advances Advances Calendar and to Years Deposits Discounts Deposits .... 62.2 15.9 7 5.8 19 56 .... 65.9 16.1 7 0.n 1957 .... 67.7 49.4 75.0 195 8 .... 65.7 55.9 85.1 *1959 .... 67.5 55.5 82.5 •Average of three, months, January to

of New Zealand are:— AVERAGE OF MONTHLY FIGURES: i £(N.Z.) MILLIONS. Ratio of 1 Advances Advances Calendar and to ; Years Deposits Discounts Deposits 1935 29.8 20.2 67.8 i 1936 30.7 19.8 64.5 : 1937 31.2 21.5 68.9 1938 .... 29.8 24.8 83.2 *1939 .... 29.6 25.1 84.8 •Average or three months, January to March.

3ist Excess or March Exports Imports Exports £ £ £ 1935 44,918,000 32,567.000 12,351,000 1 936 49,675,000 37,139,000 12,236,000 1937 60.23 4.000 47,621,000 12.613,000 1938 65,007,000 58,064,000 6,943,000 1939 57,867,000 54,408,000 3,459,000