BANK OF NEW ZEALAND

Dominion, Volume 12, Issue 223, 14 June 1919, Page 5

BANK OF NEW ZEALAND

THE ANNUAL MEETING

THE CHAIRMAN'S TINANCIAL

SURVEY

.The annual general meeting of share--holders of , the Bant of Now Zealand was .held at, the head- office of the bank, Wellington, , yesterday morning.. Mr. H.i Beauchampj chairman-of:directors, presided. Messrs. B. ..W. Kane, D. J. Nathan, W, E-eece,-J.-H. Upton,.and W.: Watson, members of. the board of directors, were present, and there was a largo attendance of -shareholders. Mr. W. ,Callender, general manager, end,ATr.iß. JI( Litchfield, chief auditor, were also preeent. ,

The difecta' report and tho baliuico. sheet, as already summarised iu Tub Dominion, were, taken as read. Tho chairman moved- the adoption ot the report and balance-sheet, and.spoki* at some length, on various nected with the business of tho bunk. Hβ said that the capital of tho bank remained: unohanged. Hβ would remind shareholders that the guaranteed stock, amounting to .£529,938, though shown a* capital, was in- reality α-terminablo. Hn. (bility of the bank- The stock was duo on July 19, 193 i, and would of cowsw then be paid off. Lγ the -meantime it w«a ' guaranteed by the New Zealand Government; but in view of tho Kink's post- " tion, the liability -, of the Government under ' its guarantee will. lw ■ regarded as-negligible v -■■■■;■ ■'■ . • •'■ ■'•'■. ' ;,. ■ The Bank's Finances- .; .g ' The appropriation made last year had; raised- the reserve fund. t0'.£2,200,000; and the further transfer ■of £150,000 it ■ was proposed to make'this year would increase the fund to ,£2,350,000. . . ■ The notes in circulation aniounted to £3 7^8,219. : This item exhibited a f v.v•tlier increase of ■ '£415,254. .■ Tho • demands upon the bank, in connection: with payment of returning-troops.had been-heavs and accounted for a large part of the.increase. Deposits amounted to £31,<1fi,' 353. These showed a growth of £1,278,- &?''*■ 4l7. The actual increase in deposits, fixed and'free, from the. public-was nearly .£2,2°0.000. Government, deposits had ehrunk-.abont £l;O00,O0O, thus niaking-tlio net increase a little over a million nnd a quarter. Bills payable and "other liabilities reached a total of £2,860,391, an increase of £530,832, an ordinary movement whioh required-no explanation. Coin, bulliorij Government ■ notes and legal tender notes amounted to £6,719,765, a.decrease of, £505,281., There had been a general shrinkage in notes and bullion,-but an expansion in coin and cash balances, leaving' the net decrease as above.' Money at short call and bill? receivable in London totalled.£l3,Blß,oso, an increase of' £1,375,176.- This increase wag temporary, and was "occasioned by the Teceipt-:of Imperial Government payirie'nfa- -for .■ colonial commandeered pro. ducel jit was therefore, in a sense, tho contra to tho increase in deposits upon which he had just commented.... -The funds were temporarily employed in gilt * edged securities, which were. i eadily, realisable .when the depositors required to draw their produce proceeds in the .Dominion. All the-.London investments ■were-written down to a figure at whichthey would be easily saleable. . .. J Investments in the Dominion now stoodriafc £3,276,162. The assets included under this and the two previous headings of coin, etc., and monev nt. oWi ca'l, etc.,' were equivalent to 62.16 per cent., or roughly 12s. Sd. in the £ of the bank's liabilities to the pu'blic. Bills discounted ■ £1,475,750, and, other advances. £17,889,787, showed a combined increase of £1,078,783.. Landed prqperty, premises, etc., were-set down at £399,867... This~.ex. hibited a decrease of £25,956,- after writ-; ing off, from tie year's' profits.. £50,000 for depreciation. There, had been no laree expenditure on any one particular building, but the aggregate outlay on (he varioiis 'properties had been considerable and- had absorbed .nearly half, of , ; the, amount of tho.-,apprppnation,■■-■ .■■■■-.■ ;•■• ■•':';'"profit 'and' Loss,":"' . ".' ; "After paying interest on the guaranteed stock, providing for the annual grant to tho provident f-und and,for .a special grant to the fund, paying bonuses to. the staff, writing 0ff..£50,000 from premises and furniture accounts, and making all the necessary, provision for bad and doubtful,debts; and for depreciation in-the value, of other assets, the net profits-for the year amount .to £388,022, : as compared with : £336,607 as at March 31,; 1918," said, the chairman. "The amount brought forward from last year was £145,702, which gives us a total of £428,724 to deal with, after deducting the £105,000 paid away in the 6 per cent, dividend of December last.. "Wehow propose to pay a'further dividend of 6 per cent, and a bonus of 8 per... cent, on the ordinary and 'B' preference shares (milking, with the dividend 1 in December, 15 percent*for tho year), and a further i per• .cent, on the 'A' preference shares (making 10 per cmt. for the year). This will make the. total of dividend and bonus for the year JE237.soo—rthe same as last year. Of the amount remaining—viz., £296,224—we i propose" to place £150,000 to credit of the' ■ reserve .-fund and to carry forward tho balance of £146,224 to neit account. The sums paid by way of rates,' taxes, and note duty this year -have absorbed £286.272 of our. earnings,- as compared with £346,384 in the previous year. "Before closing ■ ray review of the balance-sheet figures, I would like to ■draw your attention to the continued growth in our'aggregates. Our assets in this balance-sheet, you ■ will .eeo, -total £43,213,706.. The figure for the previous year was £40.838,082. The increase since March 31. 1914—i.e., in- five years—is £J8,813.'156, or upwards of £3,750,000 per annum."

Uncalled Capital. Mr. Beauchnmp referred to the bank's uncalled capital of, ,£3 Gs. Bd. per share on t150,000 shares. Hβ said that the seven years within which the board nqreed that, subject to the approval of thfl; Minister of. Finance, this , capital should be called up would expire at {Tie end of 1920. More than a year ago the board had concluded that the. time was insiirht when this capital could profitably be employed, but the Minister of Finance had withheld his consent, and in November last he. eai<l that the proposal could not be approved until all war loans had been, raised. A few rcohths later, the raising 'of. further capital by two other banks was announced TMiblioly, and the. board approached the Government again, but was informed that'the matter rnust stand over until the ...Ministers returned from London. London Board. There was no change to report in the constitution of the London board during the year. Tho members of that board continued to control the important business' transacted by the London branch with much care and sound judgment; and in times liko the present, when the financial outlook was so uncertain, and sometimes disturbing, it was a great relief to feel that the bank's large London interests were in ench trustworthy, conscientious, and capable hands. Staff- ; The termination of the war and the gradual return of tho troops was already relieving the strain upon the personnbl of the male staff. The board had had ■the pleasure of welcoming and reinstating in the service many returned officow, and there were still many more to come. The management was now in a position to begin giving much-needed holiday leavo to hard-worked officers, who had been bearing the burden of the business during the years of tfar in inadequatelystaffed offices. ' "It is with' regret that I liavo to announce tho approaching retirement of our general manager, Mr. AVillioin Collender," said Mr. Beauchamp. "Mr. Calender completes fifty, years' scrvico as an officer of the bank on January 17 next, having entered the bank's service on January 17, 1870. He has expressed a desire, now the war is over—or practically so—to be relieved .of his position as general manager early in. the new year. Ash» is several years over tho age at which he is entitled to retire at his option, wo cannot do otherwise than comply, as we have done, with very genuine regtat. Mi, £JftUeoder : has, in

the course of his fifty years' work, occupied many important posts in the bank, including that of chief auditor, and has rendered to the bank most conscientious nnd valuable service. He took up the position of general manager on April 1, 1907, so that when the time for his retirement arrives he will have served nearly thirteen years in that capacity. Intimation of changes having been mado in the Press, it was necessary that I should refer to. the matter and make these 'explanations. To'succeed Mr. Callender.as general manager, the board has selected Mr. Henry Buckleton, the bank's present manager at Auckland. Mr. Buckleton has had a considerable and varied experience _ in the bank's service, and the board beliuvo him to be well qualified ' to fill the post." . ' General Remarks. •During the year under review, certain districts had been adversely affected by drought (happily since broken), and this, added to the fact that many freezing companies were unable to take stock for treatment when read} - , owing to.lack of shipping facilities, had inflicted somewhat serious 10/ses on pastoraliste. Yet, in'spite of these conditions, the general prosperity of the Dominion was being well maintained. For this the country was indebted to the Imperial commandeer of primary products, such as wool, meat, butter, and cheese. These commodities had been secured by -the Imperial authorities until practically the doso of the 1920 season, at war prices which yielded a handsome profit to producers, and their prosperity was roflccted throughout the country. Tho prosperity of the country was further, shown in the banking returns, and it might not be out of place to give the amounts of .the fixed and free doposits and the advances and discounts in illustration.. They were:— . ■ ■ March Deposits. Advances. ..:quarter. £ £ ' 1914 24,030,250 23,666,750 , 1915 ...... 26,829,239 • 23,740,561 '■• 1916 ...... 31,274,053' 23,733,892 ' 1917 ....;. 34,356,539 27,694,930 -.- 1918'...... 35,505,497 29,317,895 •• "1919 ...... 38,8-18,826 32,203,646 In tho five-years covered by the war, tho deposits had increased by £14,518,576, s or about 62 per cent. The deposits in the Post Office Savings Bank during the same period showed an increase of £17,031,568 (nearly 98 per cent.),, and. those of the private savings banks (five in number), an increase of £1,319,423. Of the latter increase, £978,000 occurred in the figures of the Auckland Savings Bank alone.

On- the other hand, banking advances had expanded by £8,536,896, equal to about 35 per cent. The increase ■ in the advances was due to a variety of • causes.. Since the signing of the armistice, there had been a fnllingoff in domestic trade, which had had the effect of many merchants accumulating stocks of highly-priced goods, while retailers ■ were only buying from hand-to-mouth' on the assumption that, in the near future, there would be a considerable reduction in prices. Tho accumulation of stocks and tho fnlling-off in trade were causing merchants to lean somewhat heavily on the banks.

"The British Empire has played a- great and noble part in the war, and in this, perhaps, \New. Zealand can claim eome share,' said Mr. Beauohamp, in conclusion,. "At :all events, we have the satisfaction 'of -knowing that at no period of the war were we deficient in reini'orcoI ments, and the biittle records of the Jiew Zealanders in Gallipoli, France, and Palestine, are such as to fill us with pride. And may I be permitted to say that the Bank of ftew Zealand has done its ehciro in the great war, modest though that share may have been ? Of tho staff of the ■bank, 560 men, went to the front or were in campj and the casualties suffe'rad were, as already mentioned, 70 killed ana 136 wounded. To the relatives and friends of the victims of tho war we offer our sincerest sympathies; and we welcome back into the service of the bank those, who..have returned and are returning, tendering to tham at the same time our warmest thanks for the ■ services they have rendered the Empire in the ivar zone., And of those who will iiever .return—the honoured and lamented dead, who have sacrificed themselves- in tho 'cause of justice and freedom—of them, it. may b«,appropriately said:— ■■ •. "Their glory .ehall not.be blotted out, "Their Bodies are buried in peace, out their name liyeth for evermore." The Shareholders' Rights, /

Mr. , E. W. Kane seconded the motion for the adoption of the report and bal-ance-sheet.' Ho referred to the i uncalled capital on tho existing shares, and said the arrangement under which the board was to have raised'that capital was in the nature of an agreement; The shareholders had carried out their part of the agreement, and looked now to the Government to carry out its part. Mr. Kane said that recently a deputation from the Board of Directors had waited upoh the Acting-Minieter of Finance to personally urge tltat a. , favourable reply should be given to the application. In his verbal reply, and.subsequently in a letter dated April 10, the Minister had stated, with refernco to the raising of capital by. tho Union Bank of Australia and the National Bank of New Zealand, that no distinction had been made between those institutions and. the. Bank of New Zealand, because they had obtained from the Imperial Treasury authority for raising their capital, and the New Zealand Government was not in a position to exorcise control in their case. Mr. Kane added that, apart from the expediency of calling up the capital and strengthening the bank's financial resources (as waa being done by most other banking- institutions of standing throughout the world), the arrangement made in 1913 constituted a contract under which the Government and the shareholders received respective considerations. The Government obtained its consideration in full at the time, whilst the- shareholders obtained theirs, only in part.. The calling up of the J& 6s. Bd. per share was necessary in order 'to make it complete. Ho therefore expected that upon the return of the Prime Minister and the Minister of Finance no further delay would take place, and that, permission to make tho call would be given. *

Mr. C. P. Skerrett congratulated the board on the successful result of the year's operations, and said ho felt sure iio; was expressing the feeling of all tin , shareholders in regretting the impending retiremeui; of the general manager, Mr. Callerider. He referred to the salaries paid to members of the bank staff, as reported in another column. The .report and balance-sheet wero adopted. Mr. T. S. We3ton also congratulated tho board, and spoke of hie regret at tho retirement of Mr. Callender. Ho suggested that further increases in the salaries of the staff were desirable. He moved that a hearty vote of thanks should bo accorded the chairman, the directors, ana the members of the staff. Tho motion was carried. Tho chairman, returning thanks, said tli at the directors and their officers had passed' through strenuous times during the last few years. He proposed to take n. short holiday in Britain, and his plact> during his absence would be filled by Mr. J. H. Upton, who had been a very efficient , acting-chairman on another occasion.■ Mr. Cullender returned thanks on behalf'of tho'staff, and expressed grateful 'appreciation of the references that had boen made to himself. Tho meeting then closed.