BANK OF NEW ZEALAND

Dominion, Volume 7, Issue 2175, 13 June 1914, Page 18

BANK OF NEW ZEALAND

ANNUAL MEETING

THE YEAR IK REVIEW

" VERY SATISFACTORY " The ordinary general meeting of the proprietor of the Bank of New Zealand was held at tho Head Offices oi' the bank yesterday morning. There were present: The mewbers <st tho Board of Directors, Mr, H. Beaiichamp (chairman), the Hon. T. Fergus, Messrs. J. W. Cave, M. Kennedy,. W, Watson, and J. H. Upton, and about 40 shareholders. Mr. W. Cnlleiider, general manager, and Mr, 8. M- Litchfield, chief auditor, were also iil attendance. The Chairman's Address, Tho chairman, in moving the adaption of the report and bataricts-slnset, reviewed the business of the bank for the year. "Tho report and balance-sheet having been distributed som® days ago, the result of the year's working is kuown to you," said Mr. Beaachait'ip. "T. think you will agree with inc. that the position they disclose must bo regarded as very satisfactory. Yon will ohsews that the sum for distribution is £!291,G08, and tha'fc the directors propose to pay the usual dividend, and to transfer £175,000 to the reserve fund, leaving a balance of £51,60S to be, carried forward to next year. Following our usual practice, 1 will review briefly the principal items ill the balance-sheet. "The capital of the hank, as at March 31 last, was as nutter:— Authorised. I per cent. Guaranteed Stock .. £M 09,000 "A" Preference . ' Shares £500,000 •'B" Preference Shares £1,000,000 —- 1,600.000 Oidinary Shares 3,000,000 £5,500,000 . ■ Subscribed. 4 per cent. Guar- - anteed Stock ... £1,000,000 "A" Preference Shares 500,000 Ordinary Shares £1,000,000 Paid up to £3 6s. Bd. per share ... 500,000 £3,000,000 The New Capital. "The issue of new capital (viz.: 37,500 'B' preference shares at £6 13s 4d. each, and 75,000 ordinary shares at £6 13s. 4d. each), which was iii emit emulation when wc last met you, has since been ■successfully carried through. Tho amount, £269,690, appearing wilder tho head of 'New Share Account,' represents the payments received up to March 31 in respect of instalments on applications lodged up to "that date. The application list did not, as you arc aware, closo until April I 4 and as allotment could not be made, until some time subsequent to that date, the amount does not appear in the ba'.aucoshcet as passed to the credit (tf capital account. You will be in teres ted tolearn, however, that nearly every shareholder has applied for the quota* to which he was entitled, atid that, in the great majority of case 4, tba u hole of tho instalments have beeii paid up in full. Tho position, as Bidieiited by latest advices, is as follows:— To To Capital. Reserve.

37,500 "B" Preference Shares issued to the Crown, fully paid up £200*000 £123,000 53.659 Ordinary Shares, fully paid up 301,060 105,530 14,820 Ordinary Shaies, partly paid up 19,532 9,766 Total received £660,592 £330.200 Tho board will shortly consider what will bo the most satisi'actor.v iiicthod of dealing with the comparatively small number of shares for which application has not" been made, and dtifi notification of its intention' Witt be given. Under Other Heads. ",Tho reservo fund, by tho addition of tile £175,000 which I have stated tho board proposes to transfer from profits, will then stand at £1,550,000. With the sum proposed to be carried forward, namely, £51,603, the reserve fund and undivided profits »iii amount to £1,601,603. As you are aware, the premium of 50 per gent, oil the issue of capital recently made has to be credited to tho reservo fund, and fremi this source tho fund wilt, after adjustment,, benefit, to the extent of £375,000. Notes iu circulation stand at £389,882. as compared with £994,630 a year ago. Deposits (£lß,o7o P (ii3> show' the substantial iucrease of £1,655,974..as compared with tho figut&S of 1913, this movement being duo principally to larger Government bataiees. Ordinary deposits, however, also .sho;v an increase. Bills payable and othef liabilities exhibit ail increase of £36.375 on the figures as at March 31. 1013, and now stand at £1,403,456. Coin, btilliofj, money at short ■ call, etc.—Coin aild cash balances (£3,261,510} and _ bullion (£115,674), together shew an increase of £'228,255, as compared with the figures of tho previews year, while tte item money at call and short ' soti.ee, Government securities alid other securities in London, also exhibits a j substantial increase (£53,714), and : now stands at £.5,076,7411. The larger ' Govenimont balances, already referred to, account for the greater part of this . increase. I may mention that the totals under this heading, together with the amount of bills receivable and investments in tho colftttios, arc equal to 61.52 per cent, (or 12s. 3d. ill the £) of the total liabilities of the hank to tho public. Bills receivable iii Loud'tni and in transit are more by £316,853 than at the corresponding date last year, and now < stand at £3,164,i}8L The increase is due mainly to an expansion in the volume of the Dominion's exprnts. Investments in tlie colonies (£S>72,l7ff) exhibit ait increase of £14,902, as compared with tlie figures at March 31, 1013, Crowing Business. "As the result of the legislation of last session of Parliament, hv which the bank was empowered to increase its capital by £3.0(10,<Hi0 (one-fourth of which has now been issued), the institution is in a position to take its full part in providing funds for tho further development of the 'country, and for tho requirements of increasing trade and industry. Yon. will observe that bills discounted and other advances (which together total fi1.1.,.309,485), already show an increase of £603.157 as compared with tho figures of a year ago; and, as satisfactory business offers, a further gradual increase iu the total under the heading of advances may be looked for. In view of the upward movement iu our advances, I wnu'ld repeat what has been said in previous years, namely, that tho greatest- care and attention is given tn this important branch of the. Imsijioßs by your directors and the executive officers of the hank. Tlie opening of several new branches, and the necessity of providing better accommodation at points -where our premises iiad become inadequate for <mr requirements, have entailed a considera-M® expenditure in building during tho year, I am pleased, however, to report tlwt the Sydney property, to which I referred last year,' has been sold at a sntis-

factory figure. After appropriation of £-10, QUO from profits, now made, landed property aiul premises stand at £449,577, as*compared with■ .£-1(57,887 twelve mouths ago. . Profit and Loss, "After the payment of £40,00'.# interest «i guaranteed stock and the making of all accessary appropriations, in- j eluding provision for the. bank's aimnat 1 grant to the provident fund ,as well as a bonus ta the rt.ilf, and the allocation of £40,000 in reduction of bank pre- . mises and furniture accounts, the »at profits for the year amount to as compared with £302,530 at March 81, 1913. Adding tile amount brought forward from kst year, £43,117, and deducting the amount of interim dividend at 6 per coat. paid in December {£60,000), the sum available for distribution is £291,605. .. The directors now propose to pay a further dividend of G per cent. and a bonus of 3 per cent, on ordinary shares, and a further 4 per cent, on preference sharps. The amount distributed to shareholders for the war trill therefore bo £125,000. As I havo already stated, it is proposed to tfmi-s- ---: fer £175,000' to the reserve fund, 'and to carry forward the balance, £51,608. White oil the subject of, profit and loss, I may mention that, the amount appearing under the head of 'Rates and Taxes' continues to increase steadily. Nearly the whole of this outgo is in New Zealand, where our total contribution to taxation, general and local, now exceeds £">7,000 per annum, or nearly £1100 per week. In fact, the general tendency for expenses under all Iwads is to increase in a greater ratio- than the profits of tho bank; but, iw this _ respoct-, we are only in the same position as similar' institutions. .

Changes In the Board. "The term of offie" of Mr. William Miinc and Mr. D. J. Nathan, two of tire Oorernnient appointees on the .Board of Directors, .expired on March 31. last, and they retired fts at that date. The Government appointed in their ste-atl the Hon. Thomas Fergus, of Dimedui, and Mr. R. W. Kane, of Wellington, both of whom are with us. to-day. Mr. Mihie. had been a member &f the board s-iiica 1898, and ■ always took o deep personal interest in the business of the bank. His special knowledge and .training as a, banker have, oit many oe'caslofts. rendered his services -particularly valuable, and it is fitting that they should be appreciatively acknowledged, Mr. Nathan was also a ?,ealoas > and aetivc member of the board durtag his comparatively short term oT office, and wo have to express our recognition of the time and attention which he devoted to the bank's interests.- The Hon, Thomas Fergus is too well-known as a. public man of the Dominion, and a merchant of Dmwdin City, -to need any introduction from me. And Mr. Kaiie is, as you are nil aware, an old officer of the bank, well known to most of you as a former manager of the Wellington branch. Wo have pleasure in welcoming tl-i-em among us, in the assurairefe that ooch will bring to bear upon tho duties of lii-s position as n director of the hank experience, qualifications and knowledge, -which will prove helpful in the board's deliberations and conducive to the bank's welfare. The London Board. "To the chairman, and other members of the London Board, fte have acknowledge our uidehtcdiiess in connection with the coiidi;.''i of the operations in Lontfo.ii, where, as you know, a valuable and profitable business is, transacted arising cut of the Dominion's trade, and, at certain periods of the year, temporary 'employment. has to bo found for large accumulated funds. "In the task of adttiini&teiring tho steadily expanding business of tho bank, wc are, of course, greatly aided by the flue b&dy of men that constitute otw staff. I nm satisfied that in efficiency, seal* and devotion to the bank's interests) our staff is not excelled, if it be even equalled, by tho staff i>f any Aihor bank in the. Ai.istralasiii.fi Doiftiiiions. The London staff are also deserving of special mention for the seal they have displayed in tho performance of their duties, which this year have been somewhat- heavier than usual. To the whole staff the teard have conveyed a tangible-' expression of appreciation by paying them a bonus of five per cent, on their salaries —a recognition' which I have no doubt will have-rour he-arty approval," About High Dividends/ ,

Ivii\ William Watson, seconding the motion > said:—"According to our usual custom, ft devolves upon me, as the director appointed by tijc>.ordinary share* holders, and duo to retire at March 31 nest, to second the motion for the adoption. of the report and balanne-shct-:, which I have much pleasure in doing. Regarding the- affairs of the bank, the speech of tho ek3Mwa-.11, which indeed may he -termed that -of the board, lias been most explicit, and I can only add to it- that the business continues to ba sound and prosperous. It has been remarked in some quarters that bank, dividends have been high of late years, and various economic suggestions have been put forward by those who have overlooked the fact that reserve fends, built uj* in times of. tittle or bo dividends, and from premiums, on shares, help largely to earn profits, "his applies specially to the Bank of New Zealand. . . _ "I shall again stand for reflection to. tl® board at the haif-yearly meeting in December nest, when I skatl have corttpleted twenty years' service as a director. and I trust that the confidence placed 111 mo .hitherto will not he diminished on that occasion/' shareholder's Grltrcism. Mr. Joli-n Mill said that he with other shareSiold.ers vras somewhat surprised that only £175,000 had been placed to the reserve fund iast- year, iu view of the fact that in former much leaser years as much as £200,000 had becii added to the reserve fund. The shnrehqld'ei's were disappointed t&it in the Bill passed during last session of Parliament it had not been provided that the shareholders should have st least one ether representative en the,hoard. Fate- bad hi,-eii against them, in'this Matter, hut they lived in hopes yet of being fairly dealt with even by the Government. It appe.iresi now that tfe S-harohij-klcrs \refe ■JKii likely to get any additional representation en tlie board for some time to come. However, they were, satisfied tlwt things wore prospering with the bank, ai-id'that t-liey would 1 eou-tintie to prosper, hut the shareholders wmiid not give tip their rights. When th& kui.k was handed over to the Government, or was baeked by the Governsiient to the extent -of two millions, the shsrehq-klers did not hantl over the re-serve funds or the goodwill of the ba-uk. The slmrcliokiers said now that these belonged to thenij and the shareholders would, never let them oat of their clutches whatever littppffSied. Many of them thought they should baye been given their new shares without tiie ! oad of £3 Gs- 9d. For many years they had had nothing for their ttfuic-t, a«d ? they hoped that sooner or later the directors would feet "rr>niovse of foaseidlice," Slid that some relief would he given, He expressed appreciation of the work dene by the retiring directors, and h.v tlie hank st.ait. l)j- IVendergnst Knight, chainnai'i of the Shareholders' Cenmiittce which eoii--ductcd iwgotratioHs with the Ciover-ii--iwut, said' that if Mr, Mill had been in Woflinftton beforo the Bill of test year : was passed, he would have known that evervihiug possiiile had benyi dniio to si»etire' for tbe slsarehqkioi's increased re--1 presentation 011 the bnard. Me thought ' the sharcho-klera n'orfi very well satisfied with tlie appreciation in valno of their new shares, even if they had had to pay i' 3 6s. Sit premium for them. It woiikl have been useless for the board to suggest the issuing of these shares at par because Parliament would Rnt have let this through, tte was satisfied that tho settlement made was tho. beat that

could be. seemed under the rimmi- ] stances, .Me congratulated tho new ! members of the board, the Hun. Mr. ] .ii'ej-gits and Mr. Kane, en their ap- j pomlmoitt, ond also said the bank was j u> bo congratulated upon having sccur- j eel tho sendees of such men. j .Mr. T. S. Weston asked, whether the ; bids given by the Govei-imieist for their ■! stock would realise their lull iii.MU.nt ■ <»n cash. The chairman said that the bills had ! not yet been negotiated, but it was hoped that they would realise the full value. No Causa for Alarm. Mt. M, Kennedy referred to the geod work done by the retiring directors, but he pointed out that there Has iw reason to anticipate that ilia bank Wonid suffer by them being replaced' by other men. lie thought- he was only doing his duty in informing thy shareholders that tho bank would not suffer by th» changes made. He bad made similar remarks whon tho chairman was changed many years ago. At that time tlusro was apprelitwSKm }t<st tho bonis might suffer, but be hftd said that there was iK) reason to suppo-aa that the institution would suiter, and on this occasion, ho could say again that the bank was not likely to be injured by the changes made in the directorate. The Hon. T, Fergus, on Mr, Kane's behalf and his own, thanked Dr. 'Pren-derga-st Knight for his kindly references io the new directors, lie entirely agreed with Mr. Kennedy that their presence on tho board was not Accessary to tho bank's success. Whatever changes were ' ma.de tho bank was bound to «o on and prosper. Only recently Mr. '11 kinc, chairman of the London Board, wrote to him stating that the bank was destined to*- bo ou-2 of tlm greatest hanks iii tho world. That statement- ho (Mr. Fergus) would never have dared to make himself, because he had not tho . necessary knowledge, btrtji coming from ft man like Mr. Micbie, who im.d such a thorough knowledge of what t.bo statement meant, it was a very important : statement, and one that must be very ' gratifying to tho shareholders.

Chairman Iri Reply. The chakjii.au replied briefly. With regard to the amount placed to reserve fund» ho said, the directors had to he guided iu fmng ■ the amount of tho .••.pprapriatioii by the profits earned by tho tank during tlio y«ar, and this ■ could not bo regulated. It was tate that on. two or three occasions the: directors put aside £200,000 to the reserve fund, but in thas® years thera vr«»o abnormal conditions which did not obtain, in subsequent . years. In any ease, to add £ 17fl.,0'(10 to reserve fund was all achieveoiont ct which they ffiight bo* proud. There was statedly a bank iu Australia ivliic-li put such a !argo amount aside. With regard to the earning power of the hank," profits were reduced by increased expenses. They had to consider tile.. stall.. and in increasing salaries ihe.v were doing only what was do-no by other'institutions' right thisughoai tlio world: , He hoped the hank Would be represented in every centre of forth Islands where thebusiness warranted, it: order tliafc the bank might secure its share of now business, and also do its share and assist iri the development- of tlio commerce of oar country. Ctracfiming the Bill ei' last session, ie was sure iio oiio «oiild have put up a stronger fight for the shareholders than had Dr, fought alid wth-era., They had not got all that they wanted, but had contented themselves with it coisproraiso which lis Was sm-o would prove to be in the interests of Uio bank. 00 had been glad to heat Mr. Micluo's statement that the bank was destined to be owa of the largest banks in the world, as ho himself believed it would one day he. Its connection with rite Government ensured that. He themght ft would be cq!aittitens for tho bank fo sever, its alliance with tho Government. The prosperity of tho b.;ink was Weft shown by the market quotations f«r shares. Shareholders could now sell «t a profit of £7 on the original pi-ice, but he would Strongly advise them alt to think carefully brfoie tlioy parted with their holdings, A Vote of Thanks. Mr. T, S Weston proposed a vote of thanks to the directors and to thft general rannager and stair, Ilefcrrmg ft? the Act of last year, he- said: "It was said that the present Government would not make a geod deal for tho country. All 1 can say is that if any Government had made a hatter deal for the eolm-iy than the present Government iiiacle, they weak! itavo been guilty of what Would lloi been ill ally way fair as between individuals, and i don't think any Government should put itself in the position of d&hu; such a thing as would bo reprobated in private individuals." The motion was seconded hy Dr. Knight; and carried with appiause. Mr. Beauehivmp acknowledged tho eoHipli- ' Tiieut on behalf. Q.C the board, and Mr. Calleiider on behalf of the staff. Woods' Great Peppermint Cure For Coughs and Colds, never fails, ls> Stl.*