BANK OF NEW ZEALAND

Dominion, Volume 9, Issue 2793, 10 June 1916, Page 12

BANK OF NEW ZEALAND

ANNUAL MEETING

DIVIDEND OF 15 PER CENT

A STRONG POSITION

The annual meeting of the proprietors of .the Bank of New Zealand was helu yesterday. Air. Harold Beauchamp (chairman of the Directorate). presided,'and, in addition to a largo number of shareholders, thero wero present: Messrs. Martin Kennedy, D. .1. Nathan, Win. lteece, J. 11. Upton, W. Weston (directors), \V. •jnllender (general manager), and B. M. .Litchfield (chief auditor).

The adoption of the annual report and balance-sheet .was moved by .Mr. Beauchamp, who_ said: Capital.—The i per cent, guaranteed 6tock, which appeared in our previous balance-sheet at £528,988, now sands at £529,988. Tho only otlier alteration in the capital is t'.cit the new issue of ordinary shares of. .£500,(100 is now fully paid-up, the final instalments of purchase inouey having been duly paid by shareholders. , Tho Eeservo Fund.—This fund, by the addition of the further sum of £12,111 which falls to bo credited to it in respect of premium on new shares, ami tho transfer from profits. of £50,000 which the board proposes to make, will 6tand at £2,002,141—0f which amount £1,000,000 is invested in British Government securities. Notes in circulation are more by £186,772 than at March 31, 1915. They stand at, £1,862,823. I, need, only remark that bank, notes are still legal tender witliin the Dominion. - Heavy Deposits. Deposits (£23,556,676) exhibit the very largo increase of £4,815,019 as compared with the figures of' a -year ago. The factors which I mentioned in my address twelve months ago as contributing to the financial ease .in this' Dominion,' viz., the increase in ■ tile value of exports, the inability of importers to obtain many lines p and tho lack of shipping facilities, have operated in a still greater measure during the past year, and one result has been that the deposits in all the banks- have increased abnormally. In another portion of my address, I make further reference to this subject. Bills payable and other liabilities stand MaM: Mis" 8 aSninSt A67(U03 at Coin, bullion, money at short call etc -Loin and cash balances (£5,493,«22) UOt °\ (f, 83 - 553 ). awl bullion (Abtl,bod) are together more by £930 307 the abnormal growth of our deposit'" liabilities, as already mentioned, has rendered desirable the holding of unusually large cash reserves. • * The item "Government notes, £183,553 " appears, m our balance-sheet for the noto- in" 0 ' a '! d , the notes in our hands of the Comnionweallh and Fijian Governments, Monev it Jhnrf ban ;, oa, i • Administration. iJonej at short call, Government securities, and other securities in Loudon Ham W° 8 ' 729 ' 97 r«» increase of £3,a92,9<9 as compared with twelve months ago. As you are probably aware, ' tho between the values of the Dominion s exports and imports for 1 'tho wMe'h °i nn ° t0 i U i lO 1 n,)1101 ' nl " 1 conditions which have ruled, has been unusually Jige; anil this wide disparity is reflected ill, and is the cause of, the very lar"Q increase of our funds in Loudon. ; Exto London have largely increased, whilst imports therefrom have decreased, and the result is—London accumulations, It should be mentioned that ou,r surplus funds in London are profitably employed principally by investment in short-dated British Government securities, and , are leadiiy available to us .when required. I may say that the totals under this heading, together with tho amount of bills receivable and investments in : the Dominion, are equal to 71/47 per cent (ot 14s. 3d. in the £) of the total liabilities of the bank to tho public. Depreciation in Investments. In my address last year I stated that full provision had been made for all depreciation in London investments, on tho basis of market values at March 31, 1915. The ;second British war loan, at 4} per cent.-(yielding 'a return of about onehalf vper cent. more than tho earlier loan) was issued in June, 1915, and is now quoted' at a .' The rates on short-dated British Government securities have also increased: a year ago six months Treasury bills yielded £3 12s. Gd. per cent, per annum; at March 31 last tho yield was 5 per cent.- per annum. In.view of this increase in.the interest return, tho market values of all giltedged seaurities have further declined from last year's values, and considerable provision has again had to bo made bj the bank for depreciation on its investments at March 31 last. In this respect, however, our experience is only that or all other financial institutions, including the leading English banks, that liavo funds invested in such securities. The bank, I may say, lias written down tha whole of its London investments to the. market prices actually ruling there' on March 31 last. Bills receivable, in London and in transit, appear at £3,580,075—an increaso of £278,774, duo mainly to the expansion in the value of the Dominion's exports. Investments in the Dominion stand at £1,363,200, an increase of 2401,G13. During. the year the bank took up portion of the £2,000,000. local" loan issued by the .New Zealand. Government, and also underwrote or - purchased several loans of local bodies. These operations mainly account for the increase under this heailing. Advances. —Bills discounted (£1,159,030) show a decrease of £20,822, and other advances (£10,085,129) an increase of £22,422, as, compared with the figures of a year ago. The comparative lack of movement in advances is in keeping with tho easy financial conditions which have existed iu the Dominion, and to which I have already inado reference. I may say that all' the reasonable requirements of our customers have been met, and, despite war conditions, we liavo not hesitated to find money for the prosecution and development of. legitimate enterprises in town and country. Landed property and premises, after tho appropriation of £50,000 now made from profits, stand at £441,806, as compared with £451,807 at March 31, 1915. In addition to the normal expenditure on new promises, and in repairs and alterations to existing premises, there has also been the cost of providing tho necessary accommodation at branches where the services of women clerks have been utilised. As accommodation is provided for them, women clerks will also be employed at other points—thus enabling us to free more of our malo staff for military service. Profit and Loss. After paying interest on guaranteed stock and making all necessary appropriations, including provision for tha bank's annual grant to tho provident fund as well a? a bonus to the stalT, and the allocation of £50;000 in reduction of bank premises and furniture- accounts, tho net profits for the year amount to £285,800, as compared with £319,45G at March 31, 1915. Adding tho amount brought forward from last year (£57,170) and deducting the amount of interim dividend at 0 per cent, paid in December (£104.297), the sum available for distribution is £238,67-4. Tho directors now propose, to pay a further, dividend of 0 per cent, and a bonus of 3 per cont. on ordinary and "B" preference shares (making 15 "per cent, for tho year), and a further 4 per ■ cent, on "A" preference shares (making 10 per cent, for the year). The distribution to shareholders will therefore amount to .£2,16.507 for the year. Of the balance remaining, it is proposed to transfer £50,000 to tho reserve fund, and to carry forward £56,464. Hates ami Taxes.—This item, you will observe, ■ exhibits the large increase of £62,548,' due partly to tho extra, note lax paid on our lanrer circulation, but in si iiil v to the operation of tho new income tax. I referred to this subject in my remarks at tho December meeting, and you will therefore have been prepared for tho substantial increase now shown. Board of Directors.—The Government nominees retiring by rotation this vonr were Messrs. R. W. Kane and William Reece. Mr. Kane was not reappointed, and accordingly retired as at March 31 last. Iu his place wo haTo Mr. D. ,T. Nathan, a gentleman, who, as you will

remember, has already had experience on the board as one of llio Government nominee directors. I take the opportunity to congratulate Mr. Nathan upon his reappointment, and also to express the board's appreciation of the services rendered by Mr. Kane during bis term of oliice. Being (in old and experienced banker, his knowledge and judgment have been of the greatest assistance ami value, and will be greatly missed at the board's deliberations. London Board.—The financial conditions siuce the war began have entailed heavy responsibilities on our local board in London, aiid we gladly record our thanks for their care and unremitting attention in tins conduct of the bank's business in that important centre. An Explanation. The motion for the adoption of 'the report and balance-sheet was moved by Mr. William Watson, who congratulated the shareholders on their receiving the usual dividend notwithstanding the large expense incidental to the war, the rates and taxes alone having amounted to •£187,091!, as against £74,548 in the previous year. "It is possible," he added, "that, without full explanation, some shareholders may imagine that the profits amounting to £357,093, when compared with £390,1G6 in tho previous year, indicate a falling off in tho earning power of the bank, and I therefore take tills opportunity to assure shareholders that Clio ordinary earning power has increased in quite a satisfactory measure. The shortage in the profits shown is due to tho provision for depreciation in investment securities mentioned by tho chairman in his speech; indeed, the provision was much more than the shortage, but this must not be taken to mean an ultimate loss, for tho interest receivable on tho securities remains the same, as if no depreciation had occurred, and values will doubtless recover after the war. . I may quote the following appropriations fov the same purpose made by leading banks in Great Britain and Ireland in or for the year 1915:—Barclay and Co., Ltd., .£750,000; London City and Midland Bank, Ltd., ■£642,860; London County and Westminster" Bank, Ltd., £472,412; Lloyds Bank, Ltd., £110,000; Bank of Ireland, .£390,000; Bank of Scotland, ,£270,000. The motion was carried without dissent. • On the motion of Messrs. T. S. 'Weston and R. B. Jackson, votes of thanks were accorded the directors and tho staff.