BANK MEETINGS

Hokitika Guardian, 13 August 1931, Page 2

BANK MEETINGS

CHAIRMEN’S ADDRESSES. COMMERCIAL OF SYDNEY. At the annual meeting of the Commercial Banking Company of Sydney the chairman of directors, Mr G. J. Cohen, moving the adoption of the report, pointed out that paid-up capital of £4,739,000, the reserve fund of £4,300,000, and the balance of profit and loss account £124,000 to be carried forward, amounting in all to £9,163,000 was rather more than £1 for every £5 of liabilities. Banking bgusiness, Mr Cohen said, was so intimately related to world’s trade and commerce that if must inevitably be affected by any c«i,uses which prejudicaially affected production and distribution. Hence, though the business of the bank had bee;n relatively well maintained, the balance-sheet showed contraction when compared with that of a year previous. There ?*.ad been a shrinkage in deposits and other liabilities from £49,402,000 to £44,014,000. Nearly £4,000,000 of that shrinkage was accounted for by the reduction in the amount of the funds held on account of Governments and Governments Savings Banks. For the restj tlife reduction ctf credit accounts was a fiatiiml ahd Unavoidable incident t>f trade depressions due to depositors *in the absence of normal profits ttnd income and, burdened with high taxation, finding it necessary to draw upon their available cash resources wherewith to carry on. The contraction of bills receivable in London and remittances in transit from £3,062,000 to £1,774,000, reflected the reduced values of Australia’s exports and the decline in the volume of business suffered by customers. Liquid assets amounted to £17,142,000 and represented over 7s 7d in the £ of liabilities, to the public, slightly higher than last year. In referring to the fall in advances, Mr Cohen said: “Realising to the full the need for rendering every possible assistance to the bank’s clients in time of stress, in order that their operations might not be unduly restricted, your board has not hesitated to provide accommodation. to the full extent of its resources. „It has been and will continue to be its policy to give special consideration to the needs of primary producers. Within the limits of prudence it has also done its part in financing affairs of State, the accommodation granted to Governments being represented by the item already referred to, viz;, short-dated Treasury bills of the Commonwealth of Australia amounting to £1,550,000.” Although’diminished profit, Mr Cohen continued, was in line with the general trend of business operations, it was riot wholly du e to a reduced volume of business, being substantially Contributed to by increased working expenses daft to . and to interest haviilg to be paid on a larger proportion of deposits. Although heavy taxation had come to he regarded an a normal condition of affairs, it would probably surprise shareholders to hear that the rates and taxes last year amounted to a sum nearly equal to 6 per cent, of the paidup capital of the bank. Australian Bank of Commerce. Sir Mark Sheldon, chairman of directors, who presided at the annual meeting of the Australian Bank of Commerce, analysed at some length the balance-sheet. Deposits—fixed, eur-, rent . and Governmental—he pointed out,' disclose a decrease of £2,162,572. A considerable, portion, of this decrease was represented by amounts repaid to the New South Wales Government Savings Bank during the last half-year. On the directors’; desire to . assist that institution, they anticipated the maturity pf a large amount of the fixed deposits of the Savings Bank with the Australian Bank of Commerce, and paid them before the due dates. Bills in circulation and balances due to other banks showed a decreased amount of liabilities. The reduction in these figures was a reflection of the times, and indicated the decreased valume of financial transactions now taking place as compared with a year ago. On the assets side, there was noticed a decrease of £1,126,221 in the more readily realisable, assets, including cash and Government securities. Sir Mark pointed out, however, that this decrease compared more than favourably with the decrease in liabilities to customers. Government securities had been taken in at cost or at market value, 'whichever is the lower. The, bank’s holding of sterling and sterling securities were more than ample to meet all its commitments, and had maintained the same principle of safety first in all transactions. Bills" discounted, loans and advances, showed a reduction of £1,374,472, due to the great slackening off in trade and the low price of commodities. Apart from this, the board had felt the necessity of exercising the greatest caution in making fresh advances until a more stable range of values was arrived at. On the other hand, it had not overlooked the necessity of rendering, and luid rendered, aid to clients who were in need of assistance.

Though th© profit for the year at £159,54:6. showed a decrease of £93,633. land and income tax alone amounted to.' no less than £67,642,. as against £65,487r-spme > £2OOO more than i n the previous , year. The prefits had been adversely affected by the exchange the necessity of providing large sums of inf ney. in London to meet Government commitments. Profit/ from exchange had consequently been, considerably curtailed.

In mentioning-that-the hank was not adding to the reserve fund on this occasion. Sir Mark drew attention to the fact that-the bank’s published reserve