BANK OF N.S.W.

Dominion, Volume 10, Issue 2959, 23 December 1916, Page 12

BANK OF N.S.W.

HALF-YEARLY MEETING

CHAIRMAN'S REVIEW. The half-yearly meeting of the proprietors of tho Bank of Now South Wales was held at Sydney ou November 28, Sir 0. K. Mackellar, chairman of directors, presiding. The balance-sheet showed a profit for the half-year emled September 30 of ,£218,413. A dividend at the rate of 10 per cent, was recommended, together with the carrying of .£50,000 to reserve, leaving .£105,211 to bo carricd forward, as against .£88,919 brought into the accounts.

Sir C. K, Mackellar said, in moving the adoption of the report and balancesheet :— Tho usual comparison iu the past has boen from twelve months to twelve

months, but it will also be instructive to touch ou the comparative figures since September, 1914, when the war began. 'Taking the liability side first, the notes in circulation have increased .£86,000 since September, 1915, canned by an expansion of our New Zealand issue.

I hayb explained several times before that the notes of the trading banks in New Zealand under various legislative enactments represent tho principal cash currency of the Dominion, and as trade has been brisk there tho circulation has

naturally responded. Our own total issuo there is only about .£IOO,OOO, which is but a small factor in our business as a whole. Deposits aro about .£1,370,000 less than at September last year, which is a good deal owing to Government operations, these having been very active. On the other hand, they aro about .£2,000,000 higher tliau at September, 1911, when tho war began. The decrease in fixed deposits has been about .£300,000 since September, 1914, which is a small proportion of the whole. We li.ave kept the rates for these as steady as possible, believing that to be the best policy at this juncture. While wo are quito ready to accept deposit money from our clients, it is not in our judgment desirable to adopt any competitive attitudo in this respect. The item of at credit of wheat scheme specially referred to at last March review has been reduced to

.£453,000, and will disappear as the wheat is shipped. Bills payable and other liabilities have decreased £2,100,000, which is caused by the absorption by the Commonwealth Bank of their War Loan accumulations, I lmve pointed out the incidence of these special balances on previous occasions. The fluctuations have been always fully allowed for in our estimates from time to time. Tho bills payable themselves show no material change, our business in this respect being very steady. Ou the assets side the changes harmonise with those of tho other side. The first line has come down from 330,010,000 to ■£24,907,000 on the year—a decrease of £5,133,000, due to decreased deposits and balances due to other banks, and also to an increase in the advances referred to later on—but we still liold the ample proportion of over 50 per cent, of our liabilities to the public. Our actual cash holdings are somewhat less proportionately than of late. The difference has gone into Government securities, of which we hold .£6,396,000. The general advances of tho bank show somo. .£1,900,000 increase on the year. The requirements of our trading clients have been heavy, principally owing to dislocation of business through, war disturbance oi supply and shipping. There has also been sornp outgo for stocking up by graziers after the recent drought and other necessary productive operations. Much of this money will como back to us as wool and meat are realised, and , there are also good prospects for the coming harvest, which will also tend in the same direction./ As to advances generally , wo are not seeking to do more than meet tho actual legitimate requirements of our clients, trading and productive. Though these are fairly heavy for the time being, the geueral trend of our policy may be gathered Irom tho fact that, whereas our deposits, other liabilities, and capital and roscrvo have increased 600.000 since tho war began, our advances have increased only £100,000, excluding the wheat accounts on both sides as purely temporary. The difference has been kept in first lino assets.

Ihe new capital has come in well, and the number of shares not taken up or indivisible is small. The London pori in suspense on account of shareholders there. The Board of Trade places a war embargo on all new issues or capital in tho United Kingdom till the. war is over.

Profit and loss accounts show that tho profits have been well maintained. We are recommending-in addition to the usual dividend, with tho adjustments for the jew shares—tho same appropriation as last year, of ,£50,000 for the reserve tund,. and also a somewhat larger carryforward than -was brought forward, bhareholders may accept my assurance tiiat all contingencies are fully talten into consideration.

The analysis which I have so far will prove to you that, speaking generally, the bank s business has been very active. You will readily realise that the war has Jirought about many conditions which were new to us, and therefore, abnormal. But so far as the bank is concerned we have been able to successfully adapt out business to the changing circumstances- as they have arisen. Fortunately the war'conditions have bc-en accompanied, so far as Australasia is concerned, by prosperous seasons during the past year. There is scarcely any portion of this country that has not had a good time so far as the primary products have been concerned, and Now Zealand has also equally participated. We cannot say how long the war is going to last, and, furthermore, when it is over we must expect many adjustments of prices, as the result of channels of trade, now closed, being again'available, thereby bringing our products into competition with the world's markets, and particular care should be exercised with regard to land valuos in the country, which are too often based on the day-to-day prices of the products earned from the land. This is the attitude we ourselves are taking up in our business, and it is one which applies to the whole community. Summed up in a few words, it means a steady conservation of all our resources pending the developments tho future may have in storo in respect of the financial situation from time to time. Five hundred and sixty of our men have enlisted, and when all those who have applied for leave can bo spared, which will be done as soon as possible, the number will reach GOO, about onethird of the whole staff. Wo regret the fatal casualties which have occurred— numbering thirty-seven.

In order to meet to some extent the ■ibiisrmal conditions now prevailing the board have granted—as a wartime measure—certain allowances to that portion of the staff which most feels tlio strain. This involves an expenditure of somo <£22,000 a year.

The motion for tho adoption of the report and balance-sheet was adooted. Sir C. If. Mackellar was re-ele'cted a director. Auditors . elected wore Messrs. A. G. Milson (re-elected) and W. n Palmer.