WELLINGTON NEWS

Hokitika Guardian, 14 June 1928, Page 4

WELLINGTON NEWS

BANK OF NEW ZEALAND.

(Special to “ Guardian.”)

WELLINGTON, June 11

Tiio balance-sheet of the Bank of! New Zealand was circulated last week, and the document is a highly creditable one. The Bank’s balance-sheet is of importance to the whole Domin-1 ion; because the ramifications of its. business extend to the remotest parts of the country. Furthermore the State is directly interested in. the wel- • fare oT the Bank as the holder of preference shares. To say that the Bank is strong is superfluous, for it has been a strong. institution for years past. It has been a fortunate thing not only for the shareholder but also for the Dominion that the management has been in such capable hands. Although the State .appoints four of the six directors it has been careful not t:> interfere with the internal management of the institution. The connection between the State and the Bank is desirable, and the connection is in sonie degree analogous with the con-: nection between the British Government and the Bank of England, but instead of holding shares the Government owes the Bank of England £11,015,000, and the Bank is authorised to issue notes against this debt. “As sound as the Bank of England” is a phrase not infrequently used, and we in New Zealand would be quite justified in using the expression “as: strong as the Bank of New Zealand,” for the Bank is sound and its soundness is a guarantee to the country that the legitimate credit requirements of the people will always he met. But there are many churlish people in our midst who resent the success of individuals and institutions, and the Bank of New Zealand always is coming in for shafts of undeserved criticism. There are others again, bloated with egotism, who are ready at all times to show the Bank how to run its business. Then we have the parrot cry 01 a “ national bank ” by those who fail to realise that there is a science and a technique in running a bank and keeping it sound. The balance-sheet issued last week disclosed gross profits of £1,890,350, which included 1 £73,511 surplus on realisation and of maturity of Government and other securities. The expenses under all heads, including rates and taxes, amounted to £938,533 which contrasts with £962,011, the expense of the previous year. The net profit was £93(3,583, which added to the amount brought forward £534,(54(3, gives a credit balance, of £1,521,244, as compared with £1,577,060. Out of the balance twelve months’ interest on guarantee stock, amounting to £21,199, has been paid, £124,17,5 is added to the reserve fund, making that fund £3,150.000, and dividends absorb the balance, except £582,525, which is carried forward. With respect to dividends distributed the State receives £255,844, which includes a bonus of 1 per cent, £18,750 on B preference shares, while the ordinary shareholders receive £537,5C0. of which £37,500 represents bone.-. Dividends on the long term mortgage shares is included. The dividend on the ordinary shares is equal to 2s 8(1 per share and the bonus is 1 per cent. The dividend is the same as was paid last year. 'Hie capital of the Bank stands at £0,771,193, which includes £■.>29,988 of- 4 per cent guaranteed stock. The notes in circulation total £3,797,080, and shows very little difference on the figures in last year’s balance-sheet when the amount was shown at £3,7(35,593. The deposits stand at £30,339,033 against £29,(561,025 in the previous year. Bills payable and other liabilities total £3,954,878, against £3,970,221. The coin cash balances amount to £7,527,42(5 against £7,532,119. Money at call and bills receivable in London £10,005,137 against £8,051,561, Government and local bodies’ securities total £6,772,291, advances amount to £21,453,565 against £22,462,953 and discounts to £1,294,654 against £1,462,029. The annual meeting takes place on Friday when no doubt the chairman will as usual review the economic conditions of the Dominion as revealed by the-Bank's figures. It is to ho hoped that the •shareholders will raise the question of Government interference as shown by the attempt made to compel the Bank to reduce the overdraft rate. There is no doubt that the conditions have improved, but the improvement is not stable. A great many adjustments must he made before we can feel safe, and it is useless relying on advancing prices of produce for permanent improvement.