BANKING RETURNS

Dominion, Volume 11, Issue 94, 14 January 1918, Page 4

BANKING RETURNS

There are two outstanding features in the banking returns for the closing quarter _of 1917, and these are the expansion in the Government deposits and in the advances. The shipping difficulty is strongly reflected in the banking figures, for the growth of the free and fixed deposits is relatively small. There is, however, no apparent setback in the prosperity of the Dominion, which is as great as ever. Dealing first with the deposits all classes show an increase of £4,560,160, as under: — Dec. 1916. Dec, 1917. Inc. Govt, deposits ... 6,358,863 9,905,324 3,546,461 Free deposits ... 18,031,742 18,496,716 464,974 Fixed deposits... 13,229,681 13,777,801 548,725

37,619,681 42,179,841 4,560,160 The public deposits have increased by. a little over a million sterling. The growth of the Government deposits is no doubt due to the notation of the last loan, the bulk of the payments falling due in the past quarter. The Government deposits were never so large as they are now, and the following table, showing the deposits of the Government with the.local banks for the December quarter of three years, is interesting:— £ December, 1915 3,030,645 Decemlier, 1916 6,358,863 December, 1917 ' 9,905,324 In two years the deposits have more than trebled, and the State are obviously in a healthy condition. The smaller growth of the public deposits, and they show only half the increase exhibited a year ago, is due to the money being lent to the Government and to the difficulty in shipping wool, meat, and the other products, and this difficulty has compelled many to seek accommodation from the banks, which would account the increase in the advances, which totals £4,364,573. The gain in the free deposits totals £464,974, or about 2i per cent., the figures of the several banks showing as under: — 'Dec., 1916. Dec., 1917. Bank. £ £ £ N.Z 8,847,656 8,740,159 107,497 dec. Union 2,304,485 2,417,490 113,005 inc. N.S. Wales .... 2,169,329 2,458,286 288,957 inc. Australasia, ... 1,915,994 1,974,563 58,569 inc. National 2,591,464 2,665,549 74,085 inc. Commercial ... 202,814 240,669 37,855 inc. ' 18,031,742 18,496,716 464,974 inc. It is unusual to see the Bank of Now Zealand show a _ backward movement, but this semi-State institution is being- called upon to render many services just now, and unless one knew something of the inside conditions it would be impossible to assign a reason for this shrinkage. The fixed deposits exhibit an expansion of £548,725, 'equal to about 4| per cent., the figures of the individual banks being as under:— Dec, 1916. Dec, 1917. Bank. £ £ £ N.JS 6,612,072 6,928,918 316,846 ino. Union 1,597,122 1,607,405 10,283 ino. N.S. Wales .... 2,154,570 2,044,731 109,839 dec Australasia ... 886,347 1,060,633 174,286 inc. National 1,928,423 2,062,225 133,802 ino. Commercial ... 50,542 73,889 23,347 ino.

13,229,07613,777,801 548,725 inc. The deposits have grown steadily since 1913, the expansion in 1915 being very pronounced. The aggregates of the free and fixed deposits for the past five years are givon in the table appended: —

Deo. Free dep. Filed dep. Totals, quarter. £ £ ' £ 1913 12,293,875 10,545,345 22,839,220 1914 13,675,479 10,727,620 24,403,099 1916 17,293,719 11,861,582 .29,155,301 ■ 1916 18,031,742 13,229,076 31,260,818 1917 18,496,716 13,777,801 32,274,517 The gain in 1917 is the smallest shown in four years. Turning now to the advances, the figures exhibit an increase of £4,364,573, equal to about IB 2-3 'per cent., and in which all the hanks shared except the Union Bank. As usual the 'Bank of .New Zealand was very heavily drawn upon. The figures of the individual banks show as under:—

Dec, 1916. Dec., 1917. Bank. £ £ £ N.Z 10,898,360 14,036,613 3,138,253 inc. Union 4,359,357 4,315,212 44,145 dec. N.S. Whlcs 3,048,592 3,577,704 529,112 inc. Australasia 3,021,696 3,431,917 410,221 inc. National 3,758,320 4,070,170 311.850 inc. Commercial 212,083 231,365 19,282 inc. 25,290,408 29,662,981 4,364,573 inc. The discounts amounted to £1,337,334, as compared with £1,668,222 for the December quarter of 1916, showing a decrease of £330,888. Traders apparently are not making much use of bills, probably because they prefer paying for goods in cash and securing the trade discounts, which should moan something to them with the prices of commodities ruling at such high levels. __ The advances and discounts for each of the past five years arc given in the table below: — Dec. AdTanccs. Discounts. Totals, quartor. £ £ £ 1913 21,826,746 2,014,589 23,841,335 1914 23,121,235 1,811,573 24,932,808 I 1915 22,589,136 1,453,703 24,042,839 1916 25,298,408 1,668,222 26,966,630 1917 29,662,981 1,337,334 31,000,315 The movement in} the advances has been upwards for the past two years. There was a decline in 1915, but tho shipping difficulty was not at all serious then. Another interesting table is that showing the excess of deposits over advances and discounts, and the deposits do not take account of the Government deposits. The figures are given below; — Excess of Dec. Deposits. Advances. Deposits, quarter. £ £ £ 1913 22,839,220 23,841,335 *1,002,115 1914 23,403,099 24,932,808 "529,709 1915 29,155,301, 24,042,839 5,112,462 1916 31,260,818 26,966,630 4,294,188 1917 32,274,517 31,000,315 1,274,202 *Excess of advances. The excess last quarter is considerably smaller than in 1016 and 1915, but the position will right itself as soon as the produce in store is realised and brought into account. The note circulation and the coin

and bullion exhibit substantial increases, the aggregates for each of five years being as under: —

Coin and Deo. Circulation, bullion. quarter. £ £ 1913 1,671,723 5,290,183 1914 2,611,232 6,209,113 1915 3,097,816 6,950,516 1916 4,778,267 7,688,098 1917 6,464,695 9,993,391

Legal tender notes are included in the aggregates of coin and bullion. The note circulation shows a substantial growth, indicating that the internal conditions are satisfactory.

In view of the fact that the Minister of Finance will in the course of a few weeks ask for another substantial amount for war purposes, one would like to have seen the public deposits show greater expansion, but as-we arc promised more vessels to take away the stored produce it is more than likely that by the close of the current quarter several millions sterling v.'Hl be credit* ed to the producers. In --my event the next war loan will be as successful as the others, for the people have the money to advance to the Government. ■ The war prosperity is still with us.