BANKING RETURNS

Hokitika Guardian, 28 November 1929, Page 7

BANKING RETURNS

HEALTHY POSITION OF N.Z

FINANCES

REVIEW FOR NINE MONTHS

GOOD CHRISTMAS TRADE

INDICATED

I lie latest banking returns of the six trading banks in New Zealand aie still very favourable and show healthy monetary conditions, according to a statement issued by the Department of Industries and Commerce for tiio nine months ended September «iO. The banks have met demands for accommodation to an increasing extent and have ample funds for financing next season’s exports of primmy products. The purchasing power available points to the probability of retailers doing an excellent Christmas and summer trade. Nevertheless there are indications of a steady decline from the high level of the excess of deposits over advances, which appears to have reached its peak in the December quarter of 1928. After adjusting the quarterly banking figures for seasonal fluctuations the figures show that in June, 1927, deposits roar died their lowest and advanced to their highest points. Thereafter there was a steady mi. provement until December, 1928, and during 1929 the excess of deposits has declined. This must be due paitlv to there having been quite a considerable recovery in u importations and partly to lack of confidence jn New Zealand business conditions, and to greater attractiveness of business overseas, There has been some considerable export of capital, mainly to Australia,

EXPANSION OF ADVANCES, While deposits have increased by £1,972,603 as compared with a year ago, the advances have expanded by £4,418,568. It is encouraging to see increased demands being made on the banks for accommodation, as it indicates a renewed spirit of enterprise.

and to note that the banks have considerable funds available. A further feature of recent banking returns is the exceptionally high proportion of fixed deposits to total deposits. Not only are the deposits, totalling £54,-

568,626, the highest of any September quarter during the past five years,

but the proportion of fixed deposits to total deposits is also the greatest and, in fact, stands at a higher figure than any previous quarter. The high proportion of fixed deposits and -is further rise during the past quarter indicates that there is still considerable distrust of the conditions of industry in New Zealand shown on the part of potential investors. People with cap!" tal available for investment apparently prefer to place their funds on fixed deposits, or prefer to send their money overseas for investment. Returns of bank debits, interbank clearings, and note circulation may be taken as an indicator of the volume of business being transacted and of the state of trade. Naturally, owing to the past quarter being the slack season of the year, all die figures show contractions as compared with previous months, but they are decidedly better than those for the corresponding period last year and indicate that business is much better than it was a year ago, POST OFFICE DEPOSITS. Post Office Savings Bank returns continue to show the marked improvement which set in over n your ago, inasmuch as that for the year ended September BO 1929, deposits totalling £28,471,429 exceeded with- J drawals amounting to £28,152,021 by * £319,408. Summing up the position generally, tlie statement states; ‘‘From the foregoing returns ft is apparent there is u marked improvement as compared with the position at this time last year. It is equally apparent, however, thill confidence in business condilions in New Zealand has not yet been restored, and that capital is not flowing at all freely into business channels. Until it' does there cannot be a return to that degree of prosperity and employment which might reasonably be expected from: such lavourable banking returns.”