BANK OF NSW ZEALAND

Dominion, Volume 11, Issue 235, 22 June 1918, Page 3

BANK OF NSW ZEALAND

ANNUAL MEETING ANOTHER SUCCESSFUL YEAR GROWTH OF RESERVE FUND A CONSERVATIVE POLICY

The annual meeting of the proprietors of tlie Dank of Now Zealand was held in the Banking House yesterday. The directors present were Messrs. H. Beauchamp (chairman of the board). I). J. Nathan, W. Watson, J. H. Upton, It. W. Kane, and W. Koece. There was a good attendance of shareholders. Present also was Mr. W. Callender (general manager), and Mr. B. Al. Lituhheld, cliiel' auditor. Mr. H. Beaiiflliamp, chairman of directors, presided. With the consent of the meeting,, the report of the directors and the balancesheet were taken as read. The chairman, in movinjr their adoption, said;— Copies of the report and bal-ance-sheet having been distributed amonfj you, you are aware that the results of the year's operations have been satisfactory. I will ]iow proceed, as usual, to review briefly the various items of the balance-sheet. ' Affairs of the Bank. . Capital.—This remains the same as last year. The .Reserve Fund.—This fund, which, after the appropriation made last year, stood at .(iiiJii.uOO.. is under our proposals, to be increased to J;2,2OO,O00 by the addition of .£05,000 from the current year's profits.

iNoles m Circulation (J;3,312,995) show an increase of 4752.1)70. The bank's circulation may be expected to remain iiigh as.long as existing currency conditions continue. In addition to the abnormal requirements for internal purposes, coutsequent upon notes being made legal tender and aold having practically disappeared from the currency, considerable quantities of.our notes are takeu out of the Dominion temnorarily for payment of troop 3 en rojite to the seats of wa;r. The increase thus occasioned in our circulation amounts to many thousands of pounds. Deposits— ,£30,437,936. This item embraces deposits of all kinds (including Government denosrts). - The ijucreasa siiowu amounts to £1,385,146, and ocoure entirely in the Government figures. Oγdiuury deposits from the public have slightly decreased. These Imovemente liave no significance, and were to be expected owing to the transfer of funds ironi one category to the other consequent upon the subscription by tho public to the largo Government loans raised locally for war purposes'. Bills Payable and other Liabilities.— .£2,329,55!). The increase, shown'here is .2321,591—an ordinary fluctuation which calls for no comment. , Coin, Bullion, Government ■ and Legal Tender These itome eiiow an increase of .£579,439, more than the whole of which appears under the headings "Government .Notes" and "Notes of Other Banks CLogal Tender)." These are items in which large iluctuations are to bo expected while existing conditions of the note currency and ol war expenditure continue. Money at Short Call, etc., and Bills Receivable in L0nd0n.—£12,442,880. This -item lias increased j>291,731. T'Jie greater part of our large London funds continues to-be employed in securities of the highest class—mostly British Government short-dated bonda, and full provision has been made tor writing down all our investments to , market value at March 31 last.

Investments in the Dominion.—lt will .be noted that these now stand at JKi,!)58,176.

■- The total assets under the headings of Coin and Cash Balauces, etc., Money at Short Call, Bills Keceivablo in 1/iudon, uud .Government and other Securities iii London ami the Dominion, are equal to 1)2.71 pur cent., or 12s. BJd. in the £, of (lie total liabilities of the bank to the public. Advances—Bills discounted (<51,820,261) show au increase of i;G3,SJO, und other advances- (<£1(j,46M93), an increase of il ,976,730. Tho demands ni'ade upon us by the meat freezing industry continue very large. Shipping facilities are more restricted than they were twelve months iigo, and the available refrigerated, spaco of the freezing companies is becoming rapidly filled. Many companies are extending; their storage space, and in order to fill it will have to lean heavily upon the banks. Recognising how serious would be the position for our pastoralists and farmers if the freezing companies had to cease buying slock, the bank is assisting the freezing companies and "meat buyers to the utmost extent to which it can prudently go. It is to be hoped that the decreasing effectiveness of the submarines and the increasing output of new tonnage will, before next freezing neason opens, have eased the shipping position enough to admit of sufficient meatcarrying steamers being set free to remove the greater part of the existing accumulations, and Clear the stores for the iiew season's operations, Landed propertj-, premises, etc. (;E425,823), a decrease of ,£24,989. This is after writing off ,£50,000 for depreciation. No large outlay has been made during the year on any individual property, but with such wide representation as ours, building or enlargement of existing 'buildings has constantly to be going on to meet the requirements of our rapidly developing business. This outlay explains why the premises account does not show greater reduction as tho result of the application of the -£50,000 appropriation made.

The Year's Work'. After making all' necessary provisions, paying the interest on the guaranteed fitock, /making tho annual grant to the Provident Fund, paying bonuses-to the stuff, and appropriating .250,000 to the writing down of bank premises ami furniture accounts, the net profits for the year amount to JE336,G07, as against JJ365,489 at March 31, 1917. Adding to this the amount brought forward from last year .£111,595, and deducting the amount of the interim dividend of G per cent, paid in December last (.£105,000) we havo available for distribution ,£313,202. It is now proposed to pay a further dividend of G per cent, and bonus of 3 per cent, on ordinary and "B" preference shares (making 15 per cent, for the year), and a further 4 per ( cent, on "A" preference shares (making , 10 per cent, for the year). The total distributions to shareholders will therefore be as last year, viz., tC237,500; ,£05,000 of tlie amount remaining it is proposed to placo to tho reserve fund, and to carry forward the bhlnnce-of .61.15,702. Incidentally I may mention that rates and taxes (including note duty and income tax) havo amounted during tho year to X'3'16,384, an increase of .£148,333 oil the amount paid last year, which was itself <£60,!)55 higher than tho taxes paid in the previous year. Tho balance-sheet, you will observe, shows that the figures of our business are increasing rapidly. The aggregate of our assets for this balance-sheet is .M0,888.GR2, as compared with J38,250,1G7. on March 31, 1917. I refer to this development with much satisfaction. To some extent it is the consequence of tho war conditions under which wo are at present working; but 1 am persuaded that, in no small measure, it is tho result, of the business policy which tho bank has consistently followed for many years in encouraging the development of the country by assisting sound enterprise in oveiy practicable direction.

An impression hns gained ground in some quarters tlint the bank is the bank of the big mnn, mid that small accounts are not valued by us. Nothing could ba further from the truth. -The bank is by no means exclusive. It helps the small man as well as tho )>lg man. In proof of this, I may say that 70 per cent, of our overdrawn accounts of March 31 last were. Hi'. , accounts of Mtiall men having overdraft*) of £aWI or less, 11 per cent represented overdrafts between .€SOO and .SiOOfl, and only 19 per cent, overdrafts in excess of 431000. Theeo figures 6how-

that wa are not essentially, or even mainly, the I>auk of the big man.' s The small man may always depend upon his requirements receiving sympathetic consideration at our hands, and will usually have them met, provided that lie tias reasonably satisfactory security to offer us. The Staff. .Heavy demands cuntiuue to be made upon our male stall' for military purposes. The number at present on leave in consequence of war requirements is 303, and 16 have returned to the Dominion and resumed duty. Fifty-two have been killed and 135 wounded. Some of our most promising young officers are, 1 regret to say, on the list of the lost, To the friends and relatives of iiu the fallen we offer our deepest sympathy. Many of the men who have returned are labouring under disabilities physical or mental, or both, the result of their war experiences. Wherever possible, we are endeavouring to find work for them in the service. Only in cases where they af Incapable of performing bank duty are we unauie to find them employment . Hitherto the call upon out staff has 1 been confined mostly to the junior single officers of (He First Division. But now that men of the Second Division are being balloted, our difficulties are likely to increase, as the senior married and more' experienced officers will be taken. As a rule, it has been found impracticable to promote women dorks to these senior positions. If the drain continues, therefore, the situation enn be met only by the closing of branches and agencies. A good deal of this has- been done already, and more is in contemplation. The districts affected dislike the withdrawal of branches, but I trust they will accept the position philosophically, recognising that it is purely a war necessity and that, when the necessity is past they may look for a leversion to former conditions.

Our women clerks now number 326. Though in most oases the area, of their usefulness is circumscribed, they are doing efficient and valuable work in their respective spheres. In every practicable department their services will be utilised to the utmost extent possible.

We desire to express our appreciation of the work of the whole active staff, both male and female, during the year under review.

As the cost of living has continued high, the board have decided to continue for another year the monthly war bonus of 10 per cent., which I mentioned in June last was being paid on salaries of married and single men with dependants. It. has also been decided lo extend the maximum salaries to which sucn bonus applies from ,£SOO lo ,£7OO. The profits for the year being satisfactory, the board have also paid a cash bonus to all officers on the same 6cale as last year—namely, 5 per cent, on salaries to all officers who have drawn the monthly war bonus of 10 per cent.; and 10 per cent, en; the salaries of others (including women clerks and men on active service) who have not been drawing the monthly war bonus. London Bankers, Since we last met a change has taken place in our London banking arrangements. Our main account has been kept for many years with Messrs. Glyn, Mills, Carrie, and Co., having been taken over by them in 18S9, at a time when the bank's position and prospects were very different from what they are to-day. Throughout the intervening years our 'mutual relations have been of a most satisfactory character,' and it has not been without considerable regret that the long connection has been severed. But wo have felt of late years that'the requirements of our gro-ving business have necessitated that we should got into reciprocal relationship with an influential bank having large representation in the English provinces. Such representation Messrs. Glyn, Mills, dime, and Co. did not possess, being London bankers purely. Negotiations were opened accordingly with the London City and Midland Bank, Ltd., the largest joint stock bank doing business in Great Britain at the present time. These wove satisfactorily concluded, and Ihe account was transferred to our' new bankers on March ' 1 last.

. • London Board. '.Hie vacancy in the London board occasioned by th« death uf Mr. W. T. 'HolnieVUias ..been 'filled by the appoinlinont of the Eight Hou. Lord Cai-nock, G.C.8., perhaps 'belter known as a member of the British diplomatic corps under the name of Sir Arthur Nicolson, K.C.B. Lord Carnock has had a wide Ambassadorial experience. He was at one time British Ambassador at Pctrograd, and lator Permanent Under-Secrelary at the British Foreign Office. Hβ is a "director of the London- City nnd Midland Bank, Ltd., our new London bankers, and his appointment servos lo cement our cordial relationship with that progressive and influential institution. Board of Directors, • Messrs. D. J. Nathan and William Eeece were the retiring directors at March 31. They have been reappointed by the Government for a further term. Mr. W. Watson seconded tho motion for the adoption of the report and bal-ance-sheet, and he congratulated the shareholders on the continued accession of strength in ihe position of the bun!;. "I also felicitate the chairman on his masterly and iustruutivo speech," lie said. Valuable as are the statistical points lie has given I.consider his remarks regarding the present and future economic situation still more valuable, and I trust that through the medium of the Press they will be widely read, nnd taken seriously to heart by those who have not hitherto studied for- themselves tho very important matters referred- to. With reference to the idea promulgated by some persons that private capital and the monetary institutions of the present day aro inimical to the welfare of the majority of the people, I would ask how could either Great Britain or jNbw Zealand defend' themselves from nggresi eioii, or have got "on in the present war if all properly were State owned? There would have been no such thing as the capital and credit belonging to the individuals, banks, insnrance companies, and other institutions from whom the Government have received such of-, i'ectual aid. State-owned land, mines, factories, stocks, property of all kinns, and oven State bonds ar State currency notes, could not have taken the place ot capital and credit for the. realisation ot the vast amounts required to pay-for the importations of munitions and food into Britain, or the maintenance of Mew Zealand forces overseas. Neither could the present system of wealth and credit be replaced by the Stato hoarding .the precious metals, there boing insufficient in the world for the purpose, while the objections to investment in the securities of foreign countries are obvious. Before glibly denouncing individual high endeavour and the elaborate but still improvable economic systems which have grown and kept pace with civilisation, it would surely be only reasonable for 'the persons who do so to clearly and comprehensively systematise, and give equal publicity to, the methods they desire to oe adopted. , Our excellent staff- of officers has acquitted itself well in the time ot war as it did previously in the time of peace. Those who had to stay at home have cheerfully performed tlifc extra duties devolving upon them, and those who went to the front did so either voluntarily or without any kind of objection; suffered the discomforts, in many cases were wounded, and in 52 cases made the supreme sacrifice, without, so far as we know, one. act , of disobedience or even a mnrinur. All honour to them. I shall again etund for re-election ns one of your representatives at the meeting to be held in December next, and I trust then to receive the same expression of your confidence which I havo^ enjoyed for so many years. Growing Taxes. Mr. T. S. Weston, speaking to the motion, referred to the great increase in the taxation the bank was asked to pay. In 1914, tho year in which tho war broke out, taxes and rate paid amounted to =CGI,2G7, and the net profits available for distribution after payment of interest on debentures was .C315,1!15. This year the- not profit was £M,m, while rates and taxes wore J5)1G,384. This meant that rates and taxes, instead of being one-fifth of the profits availablo for distribution were now within £10,000 of being equal to that amount. In addition, tho bank was distributing in dividends only .£237,000, while it wae paying in taxes 50 per, cent, more than this amount. It was- just -as well that

these comparisons should be made, bocniiso although they were all paying cheerfully the heavy burdens put upon them by the war, the time would come when tnero would bo peace again, and then these instances of hard pressure- of taxation should be the first to be remedied. (Hem-, hear.) Self-denying Shareholders. With regard to the increases in items on the assets side of the balance-sheet, it was interesting to note that comparing them with those of other Australian and New Zealand banks, they were second on the list. He would not say that tile bank's financial position was jas strong as that of the Lank of Australasia, _yet the assets controlled by the Bank of Sew Zealand exceeded considerably those controlled by any other bank in Australia or New Zealand, except the Bank of New South Wales. This showed the importance of the work the bank was performing, and showed, also, how important it was that the bank should he kept strong. The strong position was largely due to the fact that the shareholders of the bank, had not received large dividends, a large proportion of the profits having gone to build up a reserve fund, which now stood at ,£2,200,000. At present tlio bank was paying out in dividends less than six ner cent, of the assets provided by the shareholders, whereas the Union Bank distributed in dividends GJ per cent., and tlio Bank of Australasia G! per cent. These two banks were strong and conservative' institutions, so that it could properly be said that the present etrong position of tlio bank was due to the fact that so Hindi of tile profits of past years had' gone to build up the reserve fund. Shareholders should bo entitled to some further consideration in the ncaceful years to conic after the war. (Applause.) I he motion was carried., On the motion of-Mr. Jplin Mill (Port Chalmers), seconded by Dr. C. Prendergnst Knight, a vote of thanks was accorded to the directors and staff.