BANK OF NEW ZEALAND

Hokitika Guardian, 29 October 1920, Page 1

BANK OF NEW ZEALAND

AN AMENDING BILL. (Our Parliamentary Correspondent.) WELLINGTON, October 28. The Bank of New Zealand Bill was introduced in the House to-day. The ilVa.nk’s reserve fund as shown on its last balance sheet amounts to £2,500,000 .and the Bank desires to capitalise £1,125,000 of that reserve, by the issue of shares fully paid up. It also desires to make all its shares of the nominal value of £1 each, instead of £6 13s 4d An official' memorandum states that there is no objection on business principles to either such proposal and the Bank offers to Government the following advantages:— (lj The dividend on a preference sliare shill henceforth be fixed as a preferential dividend of 10 per cent. These shares are owned by Government; (2) Out of the new 1,125,000 shares of £1 each to be issued there shall .be added £375,0G n to Govornmtent preference, present holding of £250,000 that is one thirl of the whole of the new issue, Gove-.i-ment’s proportionate share of the wlnlo beneficial interest being thereby increas cd from one seventh to more than one fifth; (3) But Government is at present entitled to only one seventh of the reserve funds and would thor'fore actually be entitled to only m little more than 160,700 of the slaves lo be paid up in full, out of the reserve fund. The adjustment of the position which allots to Government nearly 205 000 more shares than its actual quotas. ; has been arrived by two provisions, firstly that the sum distributed in dividends in any year (exclusive of 10 per cent on the A preference shares) shall up to £306,250 he divided, one seventh to Government and six seventh • Id the ordinary shareholders, which is exactly what the Government would receive if this Bill did not pass, and secondly that any amount distributed above that sum shall be divided one third to Government and two thirds to ordinary shareholders. The second orovisionis a substantial benefit to GoveiUmeiit in comparison with its present share in the divisible profits. The Bill therefore, extends the State interest in' the Bank.