BANKING RETURNS.

Dominion, Volume 5, Issue 1486, 8 July 1912, Page 6

BANKING RETURNS.

The banking returns for the June quarter are_ again unsatisfactory. Compared with the corresponding quarter of last year there is ah increase in the advances of £2,370,495 increase in the discounts of £7539* while the fixed and free deposits show an increase of only £465,822. The demands upon the banks during the past quarter havo been exceptionally heavy, and we are rather fortunate in that the institutions have been able to meet the demands The total liabilities of the five banks is £28,685,573. and the total assets £31,176,864, showing an excess of assets totalling £2,490,291. At tho corresponding date last year the liabilities exceeded the assets by £874,899. Tho liabilities and assets of tho several banks for tho past quarter show as under: — „ , Liabilities. Assets.^ Bank. £ £ New Zealand 15,190,320 13,242 770 Union 3,413,196 4 877*895 N.S. Wales 3,025.812 • 4,208'19G Australasia 2,305,303 4,191,639 National ~... 4,090,912 4,65C,'358 28,085,573 31,176,864 ; It will be noted that tho liabilities of the Bank of New Zealand exceed its assets, and this is because this bank is obliged to retain large sums in London.! .

Now wo come to the deposits, and tho comparison shows that tho Government deposits are less by £1,515,801 than they were a year ago. The figures of the three classes of deposits show as under:— June, 1911. Juno, 1912. £ X £ Govcrnm't deposits 3,519,020 2,033,225 1,515,801 dec. Free deposits . 13,683.160 14,478,802 795,642 inc Fixed deposits 10,550.715 10,229,855 329,820 dec.

e The shrinkage in tho Government s deposits is rather pronounced, and s what effect this is going to have on 1 the immediate futuro with a new t Government in power it is hard to - say, but it is obvious that tho Masi- sey Government will havo a. difficult r problem to face in the legacy of s tangled finance. The free deposits 1 have decreased by £329,820, in spite 1 of tho fact that the banks have re--3 cently raised their rates. The exi planation of this movement is prob--1 ably that owing to the higher rate - ruling for mortgages, investors pre- - fer theso securities to letting the - money out to the banks at comparaE tively small rates. The fixed deposits ' for the June quarter of the past five - years are appended:— June. £ I 1908 '. 9,722,662 1909 10,039,089 1910 10,515,091 . 1 1911 10,559,715 ' 1912 10,229,895 ' The free deposits show an increase ; of only £795,642, and in view of the ' great expansion of the advances, theso deposits should have been much larger; that they are not larger points to the fact that the money ' borrowed from the banks has been required to discharge foreign obligations, and that in turn indicates excess of imports. The movements of tho free deposits as they affect each bank are as under:— June, 1911. Juno, 1912. Bank. £ £ £ N. Zealand 6,374/128 6,869,108 494,678 inc. Union ... 1,915,356 1,956,181 40,825 inc. N.S. Wales 1,767,308 1,752,314 14,964 dec. Australasia 1,544,049 1,627,377 82,728 inc. National 2.081,419 2,273,794 192,375 inc. 13,683,160 : 14,478,802 795,642 ino. The Bank of New South Wales is the only institution to show a decrease. The free deposits for the June quarter of five years arc shown below: — June. / £ 1908 11,532,286 1909 , 10,892,670 1910 12,946,101 1911 13,633,160 1912 14,478,802 As already stated, there is an increase in the advances of £2,370,495 compared with last year, and an increase of £4,918,657 as compared with 1910. The banks have met the demands upon them.rather well, indeed they may have erred on the side' of liberality. A comparison of the figures of _ the several banks under this head iB interesting: — June, 1911. June, 1912. crease. Bank. £ £ £ New Zealand 7,096,320 8,338,442 1,°421"2 Union 3,157,465 3,033,877 476 412 N.S. Wales 2,774,249 3,044,665 270,416 Australasia 2,872,176 3,069,249 197073 National .... 2,884,180 3,068,653 184,472 18,764,390 21,154,885 2,370,495 Taking a series of five years, the figures aro as under:— June. £ 1908 19,13G,57G 1909 17,075,129 1910 .■ 16,236,228 1911 18,784,390 1912 ; 21,154,885 The discounts show only a very moderate expansion, tho total for tho past quarter being .£1,839,004, as compared with £1,831,465 for Juno, 1911. The discounts were much larger in both 1908 and 1909. If we take the volume of the fixed and free deposits on tho one hand, and the advances and discounts on c the other, we can readily ascertain 1 the indebtedness oft the banks to the i public, and of the public to the banks. The fkures of the several institutions in this respect compare as ■ 'under:— ' „ , . Deposits. Advances. < Bank. £ £ Now Zealand 12,057,291 9,253,533 l Un"* • 3,242,309 3,845,555 ' N.S. Wales 3,410,344 3,204794 n Australasia 2,195,927 3,304,219 National 3,790,823 8,385 788

24,708,697 22,993,889 The advances of the Bank of New Zealand are just about 75 per cent, of the deposits, the Union Bank has .lent more than it has received, while the figures of the other institutions ■-are just •,?;:■ normal. The excess of deposits over assets amounts to £1,714,808, while a year ago it was £3,627,020, and in 1910 £5,525,627. AVe come now to the note circulation and coin, and both show satisfactory increases. Tho figures for five years are as under ;-^ Note Circulation. Coin! Juno. £ £ l, ™ 1,666,616 4,917,718.' J909 1,623,670 4,956114 1910 1,615,784 4,994,850 •1911 1,717,000 5,103,064 1912 1,773,914, 5,251,995 The expansion in the note circulation is an indication that trade within the Domiuion is better than it was a year ago, and the increase in the coin is rendered necessary by the increase in the obligations of the banks. It is worth noting that gold is tho base on which a superstructure of credit is raised, and that there can be a contraction of credit without there being a contraction in the supply of gold. Credit is being contracted, and this is spoken of as a stnko of investors for higher rates. J. he effect of this contraction of credit must be adverse, that is, to say it is bound to cause a general fall in the values of commodities. Look- 1 ing at the banking returns as a. whole, one cannot do more than suggest that caution is still very imperative. The change of Government will probably give more confidence to capitalists, and it is just possible that we may see a revival in industrial development; if eo it would be the best thing that could happen to the country.