UNION BANK

Evening Post, Volume CX, Issue 71, 20 September 1930, Page 12

UNION BANK

"AN ANXIOUS YEAR"

.WHY DIVIDEND WAS REDUCED

The lion. K. W. Parker, chairman of the Union Bank of Australia, commenting on the bank's annual report and balance, informed shareholders in London that

•'.Altogether the past twelve months had been a very anxious and difficult one for banking, and at the present time he could not sec much prospect of any improvement. The board, after careful consideration of the state of trade and of the smaller amount o£ business transacted on all sides, came to the conclusion that in the general interest they had no alternative but to reduce the dividend.

After making the usual provision for bad'and doubtful debts, the profit for the year amounted to £612,000, including £88.336 brought forward, or close on £100,000 less than the-profit of last year; £25,000 was to be put aside for new buildings. A dividend of 12% per cent., free of United Kingdom income tax, absorbed £500,000, and left £86,991 to be carried forward. Total figures of the balance-sheet showed a falling off of £2,207,000, chiefly caused by deposits being £1,060,000 and bills payable £1,121,000 less. The latter showed the heavy decrease there had been m business in Australasia, especially in that portion that is dependent on imports, which was likely to be accentuated by the new

tariff. ' , Remittances in transit decreased '£4,906,000; advances increased £2,440,000. j Increases were also shown in specie, cash balances, and bullion of £600,000, and in investments of £131,000, these amounts being partly offset by a decrease of [£471,000 money at call in London. FIXED DEPOSITS EXPAND. I"ixed deposits had continued to grow, paving increased by over £1,000,000, while the amount on current accounts had fallen by over £2,000,000. The falling off in the deposits was due, the chairman thought, in a great measure to the great drop in prices of wool and wheat, and all Australasian produce generally, also to ■withdrawals by depositors lor the pur-. T>ose of investing in the various lederal loans raised internally. There was great competition, too, for deposits from municipal councils -and other public bodies, who offered a higher late than the banks could afford to give. Increase in advances was due in a great measure to clients naturally requiring more accommodation to carry them on during the lean time that they were experiencing. Reviewing exports and imports, the chairman regretted the surplus of imports over exports of £11,000,000, because until Australia could make exports exceed imports her finance must continue to bo a difficult question. _ While New Zealand enjoyed last year a substantial surplus of exports over imports, she in an adverse year had almost succeeded in balancing her accounts. THE WOOL POSITION. Production of wool in Australia for the year ended 30th June last was 2,843,----000 bales, diii- >■% very little fromtbat of the previ... ,ear; of these, 2,4/6,000 bales were solo . Australia at an average price per bale of £13 5s Gd, while the average price per pound was 10% d against the previous twelve months of an average price per pound of 16% d. The value realised for the sales in the Commonwealth amounted to £32,806,000, as against £56,720,000 for the previous season or a drop of about 35 per cent. It was calculated that there remained in store on 30th June 109,000 bales, while m London there were about 50,000 bales unsold. Since 30th June, however, some 50,000 bales had been sold in Australia, so that there remained to be carried over into the new season about 100,000 bales. In New Zealand the total clip amounted to 714,000 bales; of "these 425,000 were sold in the Dominion at an average price of £12 2s 2d per bale, and an average •price per pound of B%d. The total gross proceeds ■of this season's New Zealand wool sales showed a decline of nearly £7,000,000 as compared with last years sales The carry-over .in the Dominion is estimated at about 100,000 bales. The drop in value of 35 per cent, was, of course, a very serious item to the Australian farmer, and represented a total in'money of about £20,000,000. It was estimated that the coming clip in Australia would fall short of the production of last year by about 100,000 bales.