The Guardian And Evening Star, with which is in corporated the West Coast Times. WEDNESDAY, OCTOBER 7, 1925. OVERSEAS BANKING.

Hokitika Guardian, 7 October 1925, Page 2

The Guardian And Evening Star, with which is in corporated the West Coast Times. WEDNESDAY, OCTOBER 7, 1925. OVERSEAS BANKING.

In the development of British foreign trade during the last forty or fifty years, remarks a lam don financial journal, the great oversea hanks have played an important part. For the most part these institutions are British in origin, their capital being mainly held by British investors. They operate chiefly in the Dominions oversea and m India, hut some confine their business to foreign countries. The Umpire is fortunate in these hanks, for almost without exception they have been very carefully managed, and although. when necessary, their directors have not been lacking in enterprise. the enterprise has been tempered with caution. The result is that they fulfilled their functions with credit. and incidentally made satisfactory profits for their shareholders. The building up of a strong financial position lias not been sacrificed to the distribution of excessive dividends, and to-day these institutions are exceptionally strong. Several have accumulated reserves which now exceed the paid-up capital. This is particularly

noticeable in the ca>e of the Eastern banks. The Hong Kong and Shanghai Banking Corporation lias a paidup capital of $20,000,000, hut a silver reserve of $25.5(10.000 and a sterling reserve (held in Britain) of £4..*>00,000. The Chartered Bank of Tndia. Australia and China lias a paid-up capital of £3.000.000 and a reserve fund of £1.000,000 while the figures of the National Bank of India are £2.000,000 and £2.800.000 respectively and of Mercantile Bank of India Cl .050.00(1 and £1.300.000 respectively. Turning to some of the Australian hanks, the Union Bank of Australia lias a paid-up capital of t 13.000.000 and a reserve fund of £4,050,000. the respective figures in the ease of the Bank of Ansi rain sin being £4.000.000 and £3.700.000. The National Bank of New Zealand lias a paid-up capital of £1.500.000 and a reserve fund of £1.470.000. A feature brought out by a study of the last, annual reports is the measure of uniformity in the profits of the I*.astern hanks. For each of flic last three years those of the Hong l\<»ug and Shanghai Bank have been in the neighbourhood of $13,000,000. of which about $11,000,000 have been absorbed in dividends. while in each year $1,000,000 have been placed to silver reserve and a like amount, to hank premises account, while the sum left afterwards has been about $3,300,000. The steadiness of these result < may seem somewhat remarkable in view of the disturbed conditions in China during the la>l year or so. In the ca>e of the Chartered Bank ol India. Australia and China, the net profits in the last four years have ranged from £770.710 lo £780.531. The distribution to the shareholders lias been £(107.500 in each of those years, while £IIIO.OOO has been placed lo reserve annually for a nun’ll longer period, and the amount carried forward has been a little over C 200.000. Similarly, the net profs of the National Bank ol India since 1020 have ranged from £534.700 to £553,308, and in the last three year-, they were almost identical in amount. 4he dividend lia-. absorbed £400.000 annually since 1021. but linos

has been some variation in the s|>ccial allocations and in tin- amount carried forward. In some contrast with the above results is the experience of the Australian and New Zealand banks. These have benefited from the greater prosperity cl .Australia and New Zealand caused by the high price of wool and from the generally sat i-factorv commercial nioveniciii. I Inis, ihe net pmlit.s of the Bank ol \ list i alusia I'm the past year amounted to £020.004 as compared with £018.5.40 in the previous year: those of tie’ Bank of New South’ Wale- lo £Blll.Bßl. against £825.082: those of the Bank ol New Zealand to £810.45. against £757.031 and those of Liu- l'nion Bank of Australia lo (.'500.300. against £550.201 Tim Commercial Banking Company ol Sydney showed net prolits of £4ol.u ( )i again-t £432.008; the English. Scottisi

and Australian Bank of £502.503. against £470.847. and the National Bank of New Zealand of £270,820. against £213.035. On the other hand, the profits of the Commonwealth Bank of Australia dropped from £328.300 lo £200.054. which is scarcely an argument in favour of the nationalisation of banks.