BANK OF NEW ZEALAND

Hokitika Guardian, 20 June 1924, Page 4

BANK OF NEW ZEALAND

ANNTAL MKKTIXG OK RROI’RIKTORS. WKLUXGTOX, >1 iiin* 2i). The animal meeting was held to-day. •Mr William Watson, Acting-Ciiuir-inan of Directors, presided, and said: liet’oi'e proceeding to the business which has called us together, I have to apologise lor the absence of our riiuinuaii. Sir George Klliot, who is at present visiting the Old Country. C.UMTAL, RKSKRYK KUXI), AND U.YDIY'II)KI) PROFITS. At our last Annual .Mooting you were inl'tirinotl of the Hoard’s decision In issue at par C1.125,0H0 of new capital. .One-third of the amount was, in terms of the “Hank of Xew Zealand Act, 1020,” offered to ilis Majesty the King in the form of I’roferouee “li“ Shares, and was in due course accepted. The remaining C750,()(10, viz., the Ordinary Capital, was offered to the Ordinary Shareholders in the proportion of one new share for every three share.- held by them. OoS shares were not applied lor by the shareholders who were entitled to them. These, and 1*217 fractional shares, were offered to holders ol Ordinary Shares for purchase by tender and were over-applied for. with the result that tenderers at Cl! lls Id and over received a full allotment, which was made as from Sth March, whilst those at Cl! 11.-. received .Tt.S2 per cent. The premiums totalled COll-'i, which amount, in terms of the Hank's Deed of Settlement, has been credited to the Reserve Knud. Our Capital. Reserve Fund, and l n» divided Prolits, after dealing with the year’s profits as recommended in the Directors’ Report, will stand as I<allows : e Preference Capital held by the (lovernment of X’.Z. ... 1,50l),000 Ordinary Share Canital .'1.000,000 Reserve Knud J.dL’b.Odli Cmlivided Hum is oOti.bDf

£7.331.. r il3 In addition. tlu'ii’ is tlio ! per cent Stock nunriiiiti’i’il I»v tin* Covoriimeiit of Nov. Zealand. amounting to i>S. :r in I diii’ in IK? I, which riiiiks lor ropsi vDicii t subsequent to i lie linhilitios of the Hitnk to depositors .’Hid other creditors. These funds, aggregating f-T.Xtil .’VII. are emtal to over 20 per cem of tlie Malik's liabilities to the public. NOTE (TUCn.ATIOX. During the year the Note Circulation of our liauk has averaged ahoiiL £3.!)2(i,0<1f), the Inchest figure readied being oI .SSdpiiJS, and the lowest £3,1i.Vi,570, whilst our local right of issue is about £ lll.'il 10.0110. We have, theri’l’orc, an ample margin of currency avaiiahle io meet the ordinary requirements of our customers and to provide a substantial reserve for tin emergency. The highest point which the total circulation has ever reached was 8 ) million:; in December, M 320, and sittee that tittle ii has gradually come down until, at the end of -March last, it was C'O.tilUl.OOO. DEPOSITS. Our Deposits at the halance dale amounted to L'.iO.dOl ,710. When compared with the figures of the previous year,' these show an increase ol £497.793. The Deposits include those which we hold on Oovornnieiit Account. in which there tire sometimes very large fluctuations, and it happens that the (invents incut balances on .'list March. Id-1, were nearly £1,8011,00(1 less than on the corresponding date in Id:.’:!, so that the Deposits m liich we held on account of our other customers have really increased during the year under review by more titan £2,200.000. M11.1.S I’AYARLE AND OTHER LI ARIDITIES. The reduction lor tlie year of £• ?<O.PSs j t | this item does not call for spec ial comment. * DIVIDEND. You will observe that for the full year we propose to distribute in dividends £187,307 Is 3d. On t'ne Ordinary Shares this works out at the rate ol two shillings and eightpenee per share on the ( apital as in l-i April. IK-’:?, one shilling and fourpettee per share oil the new Capital paid us as at, Ist Oetoher last ; and twopence per share oil the --’()• 1 shares paid no as at Bth Alareh. CASH. HALANCES AT HANKERS A- OTHER klOl lD MKSOI'IHT.S. Cash, Habitues at Hankers. Government and .Municipal Securities, and other readily realisable assets, apart from ordinary advances to customers, erpml rather more than 70 per cent of our liabilities. This position must lie gratifying not only to depositors hut also to our borrowing customers, denoting as it does our ability to withstand titiv stringent monetary conditions which may arise, without the necessity for calling in advances. PROFIT AND LOSS ACC'OI'NT.

The ordinary operations of the Rank for the year resulted in a profit of £730,831, an increase of £182,194 as compared with the preceding year, but. of course, we had the use of practically the whole of the new capital since Ist October last, and, in addition, our resources have been fully and profitably employed. Further, less provision for Rad and Doubtful Debts was required. The balance of the year's dividend will be paid at Wellington to-morrow and at Rrauches on receipt of advice. ADVANCES. Tito Advances to our customers amount to £16.787,100 —an increase

upon the figures of hist year of just about C 1,000,000. DAXDKI) PIJOPKRTY, JIAXK PRKMISKS, KTC. This item shows an increase of Cl I.Oilo. due mainly to the cost id' additions to existing buildings and the erection of new premises. With the development id' the Dominion and the consequent growth of the Hank’s operations, expenditure of this nature will be constant, but, as the Asset is represented in the Halance-sheel. at very much less than actual value, we have thought if preferable to add rather miir, than usual to the Reserve Fund and to the “Carry Forward.’’ instead of writing down the value of property and premises. HOARD OF DIRF.CTOHS. The two (iovernment members of the Hoard, whose term of office expired on Hist March last, were Sir Harold Jfeauehamp and Mr .1. 11. t'pfon, and they were re-appointed. Sir George Klliot was re-elected Chairman for the current year. Mr Richard Waine (tilths and Sir •lames Henry Guiison gave due notice of candidature for the vacancy oil the Hoard caused by the death of Mr It. W. Kane, one of the representatives of the Ordinary Shareholders. The poll closed on diith'ultimo, and I now declare Mr Gibbs elected, he having received !)(i0,7.‘il votes, against -loSI,-'3Ol recorded for Sir James Gunson. M,r Gibbs rose in the Rank's service to the important post of manager at Dunedin, from whence he was appoint-

ed by the Government to the Chief Atidilorship five years ago. lie resign-

ed from tluiL high position to stand as director, and I. and my colleagues also, welcome him to the Hoard. Ilis wide experience and intimate knowledge of the business of the Hank will be of great value in our deliberations. STAFF.

We have marked our appreciation of Ihe work of Ihe stall' during the past year by granting bonuses to till the members, with the excepi ion of Ihe junior unmarried men who leieive annual increases ni pay according to a fixed scale. In a great many eases substantial i Ol ivases 1.1 .-alary have been granted, :mi| we can safely say that the pay ol our stall', including the bonus, is on a liberal seiile.

11l salaries, la,mis and the annua coni ril>iil ion to our Officers' Pensioi I’Tind we naid last year £ 100.5. M. will'd is £30,8(11 greater than ihe figure twi

years ago, although the business ol the Rank has not increased in anything like the same proportion. It will be seen troll! these figures that the Stall is sharing in the prosperity ol the Hunk, mill rightly so. UFSINESS OPTS IDE NEW ZEALAND In London and Australia our Rrnnehes continue to progress and to perform the functions and maintain the connections lor which they are necessary. EXCHANGE AND (TRRENCV. Owing to the fact that gold hits reused to function a- currency and to the existing export and import conditions. the difficulties ill the exchange position between London and New Zealand, and New Zealand and Australia, have become intensified. The present rate of 3 tier cent for purchasing sight drafts on Loudon is unusually heavy for this Dominion, although light compared with the exchange burden borne by many other countries—the Australian rate, for instance, i--17s (id per cent higher. It is fortunate that the better prices now ruling for most lines of produce much more titan counter-balance the adverse exchange. The question of exchange is so interwoven with that of currency, and the two are so complicated, that those who have lately expressed impracticable views may perhaps he excused. The Ranks possess the necessary funds for meeting the demands of their customers, but. unfortunately, a eoneidernble portion ol these Minds is in Loudon, and no means exist tor transferring an adequate amount to Australia or otherwise making the money available tit the latter point.

This Dominion is very much interested to see a satisfactory solution of the difficulty, because stringent monetary conditions in Australia are quickly lelt here. Considerable sums <>l Australian money have in the past been invested in New Zealand, and the remittance of these funds helped in a measure to minimise the effects.of adverse trade balances between New Zealand and the Commonwealth, tint now the shortage of money in Australia lias caused a cessation of such investments. The result is that the trade balance, to a considerable extent, has to he settled bv remitting funds from New Zealand to London, and thence to Australia — this being not only a costly proceeding hut. .somewhat difficult to arrange. How the Australian manufacturer who ships, in competition with the Mrittsh exporter. to New Zealand suffers from this state of affairs may be gauged from the tact that tit the matter lit exchange he is handicapped to the extent of 3i per cent as compared with the position in 19-1. IMPORTS AND EXPORTS.

Tlie overseas trade of the Dominion for the year shows, as far as Exports are concerned, a satisfactory increase

over the previous year, but the inerca

in the imports cannot, in view of the necessity for husbanding resources, he regarded with satisfaction. The figures for the two years compare as follows:

lialaiue in favour id' the Dominion ... 5,07A,117 7,250,5bS These figures speak for themselves; the large imports undoubtedly reduce the monetary wealth of the Dominion, but the heavy public expenditure, largely necessitated by the War, and for remunerative improvements, in so far as it is expended in the Country does not, apart from the imports, diminish that wealth. MOXKY MARK FT.

Issues of loans by lairal Hollies in Xew Zealand during the last twelve months have been oil an unusually heavy seale, the total amount approved by the Government being CO,(I!)!!,I!)!). With hut few exceptions, I .oral Hollies have to pay 0 per'cent for their loan requirements; indeed, it is not easy for any hut l.oeal Undies of the four chief centres in the Dominion to get money at or below that rate. The heavy cost of transferring proceeds of loans from London has militated against borrowing in that market, hilt a recent improvement in monetary conditions there has enabled several issues to lie made at a net cost to the borrower of about 5:,' per cent. The issue locallv of loans of Local Hollies Inis adversely affected the increase of Fixed Deposits with the Hanks, and, coupled with the competition of the Host Office Savings Hank and Companies for deposits, the lending resources of the Hanks do not expand us it is desirable they should do.

In thi' North Island money is now rarelv obtainable mi mortgage at less than Oj per cent. Conditions are easier in lhe South, where the ruling rate, fur lirsl-ola-s mortgages is (i pur cent.

Tlie Hanks have been in a position to meet the proper hanking requirements of their customers, hut much business is ottered which does not entile v.iihio that category, and, consequently, has to lie refused. .MOM ATOM I I'M ON .MORTGAGES. The Moratorium on Mortgages will expire at the end of this year, and the public mind is exorcised as to whether there will tie nnv extension of it or not. The Act lias been in force for ten vein's—some of those vears the most

prosperous ihe Dominion has ever experienced—therefore, logically, mortgagors who have been sheltering under its provisions should now ho left to face their positions. New Zealand is

tlie only country m the Hl'itisli Empire, if not in the world, in which a moratorium on mortgages has been renewed front time to time for stteh a long period, so that it cannot he saitl that mortgagors 'nave not received a maximum of ('('.ttsidet'alion.

]}rsixi'>s ()N D 111 DNS IN TillDOMINION.

Hrodui'i’i's of primary products her have, on the whole, experienced a lair ly good year, though weather cotnii lion, were not altogether favourable The Woollen Manufacturing iailiistr i- feeling competition trotu abroad consequently stocks are increasing am profits shrinking. Saw-millers and Timber merchant! have ilnne very well, the ili'tnaitd tin timber being heavy and continuous.

That this country with its nbiindnnl coalfields should have found il necessary to import no less thill

£(i3l.(M!» worth of coal front Australia last- year is most disappointing. tnfortunately. the tactics ol tlie coalminer, in recent years have seared investors and inoney-leuders. and consequently. little money is likely to he iavesteil in coalmining ventures. During the season just ending, there Mas been etrong competition from Freezing Companies and Exporters tor -hoeo' and lambs tit remunerative prices to the producer, nod tit the prices paid it must- tie a difficult matter, for the purchasers to make profit. Ihe steady increase in wool values will help to some extent. The exceptionally dry season has been responsible for a large proportion of second-quality lambs reaching the Freezing Works. The market for lieef shows no improvement. and it is evident that- our frozen beef cannot, at the present time compete successfully with the chilled beef of the Argentine. It is gratifying to note tlie great recovery in wool prices which has taken place during the !a,t twelve mouths, with the demand for wool still unsatisfied .

Although till qualities are wanted

ihe most satisfactory feature is the strong demand for medium and coarse wools, as these comprise the hulk of the New Zealand clip. Another gratifying feature is the export of wool to the East, which, during the past year, amounted to approximately 203.000 bales from A u-tra-in and New Zealand as compared wi th, sav 20,000 bales in 1014.

Compared with values ruling t welve mouths ago. crossbred wools show an increase in value of approximately oO per rent, to 03 per cent., merinos and half broils 2"> per rout, to 40 per cent. The position of the dairy produce market is onusing’Soiuo concern. Although. owing to weather conditions, the quantity exported so far this season i, not as great as last, heavy slii|>litonts have replied England during the'last few months and have met, with a poor demand at reduced prices. Mainly owing to the increased quantities reaching the English market front other countries, it is probable that dairy farmers may have to accent lower prices for their produce in tlie future, and this, of course, will he reflected in land values in this Dominion. The Dairy Produce Control Hoard recently formed is expected to improve

marketing conditions, or, at any rate, to see that tlu* interests of Dairy Farmers are protected to the fullest extent possible. Owin'; to the serious shortage in the wheat- yield of the Dominion, the Government has arranged to make large purchases in Australia. This wheat purchase has intensified the acuteness of the exchange position between the Dominion and Australia.

Country lands have not changed hands to any great extent, vendors’ ideas of value still being much in excess of these of prospective buyers. There is no (piestion that considerable areas of land, thrown open years ago by the Government for settlemen under various leasehold tenures on what were at the time considered reasonable terms, should never have been grassed.

It is desirable to sound a note of warning with regard to city and suburban properties which in some centres have changed hands at such prices that, whether the occupiers he owners or tenants, the rent charges are necessarily so great that success in business is rendered verv difficult. THE OUTLOOK.

On the whole. I believe we may regard the immediate outlook with equanimity. Prices for some of our :m,ost .important products may decline, although during the coming •season there should still he a considerable balance of trade in our favour. Many of our producers are carrying on under adverse conditions but their competitors abroad are having trouble also. It must not be forgotten that the great majority of our settlers are in fair circumstances, and quite able to withstand a fall in value of their assets and reduction in income. Had economy been practised during the years when phenomenal prices were received for our product!), there would lie less grumbling to-day over the burden of taxation and the difficulty of getting an adequate return on capital. We must look forward to a gradual deflation of laud values as the eure for the worst of the evils from which we at present suffering. Stnbilsation at present, values is out of the question. 1 would urge one and all not to lose sight of the very inq>ortont fact that economy in it* wider sense is absolutely necessary to the welfare and prosperity of this country. We have in New Xenia ml most things suitable to healthy life. but. unless our exports can be produced as cheaply as those of other countries, and unless wc avoid excess of luxury in our imports, it stands to reason that, considering our heavy obligations. ultimate prosperity will not he ours. No one should idle or no slow in his working years, and the fertility of our lauds should, be carefully maintained We have one of the finest countries in the world: let us keep it s:i by showing example to those who will inherit it after us.

1 now move the adoption of the Report and pain nee-sheet. mid ask Mr Reece to second the motion.

:il Ul/U/21. c L' Imports ... •I1.101,7ri(! Kxports ... ... <15,518,700 51,()52.(iW;