INCREASING PROSPERITY PREDICTED

NZ Truth, Issue 1189, 13 September 1928, Page 19

INCREASING PROSPERITY PREDICTED

National Bank of New Zealand FaUows

Enterprising Policy

(By "Fiat Lux.").

Judging from the result shown by the National Bank of New Zealand for its year to March 31 last, the successful efforts of banking ' insiUuliomto. stabilize the finances of the country proved somewhat costly t&this instUutiohi

DRIEFLY, the Associated Banks, In O an effort to stimulate recovery from -.... the 1926-1927 Slump, raised the rate of interest on overdrafts and also rais.Ed the rate payable by them on twoyear fixed deposit moneys. This action, which time has proved to be a wise one', brought forth a storm of protest that the banks were exploiting the public, but the published'accounts for the year ended March 31 last appear to prove that so,far as the National Bank Is. concerned, the only exploitation was done by the public at the expense of the bank. In the case of this bank, the balancesheet shows , that whilst mcreased by nearly a million sterling, advarices—which were, of course, restricted, not only by the higher Interest rate, but also by the declared policy of the banks^declined by a similar amount, so that this feature alone -1 affected the institution's gross earning to the extent of approximately. £ 50,000. The chairman of the board, the Hon. W. P. Reeves, m his annual report, -delivered a very interesting and informative survey of conditions m the Dominion, expressing the opinion that the tide of affairs turned definitely m November, 1927, and that although caution was still required at the helm of the country's Ship of. Commerce, New was likely to enjoy many years of-increasing prosperity. f " "This opinion of the country's -prospects is, of course, founded upon the very firm foundation of import and export figures. Briefly, for the year ended March 31, 1927, the country had an< excess of imports of £2% millions, whilst for the year ended March Slj 1928,' this had been converted into an excess of exports of ■•£lO% millions, so that the comparative improvement was £13% niillions m our favor. This is a really wonderful result, and goes 'to: show what extraordinary reouperative powers this glorious little country possesses. ■ : ' ■Now let us see how the bank has fared during the past four years: Gross 1925 1926 1927 1928 proflt ..631,362 687,124 692,268 684,341 Expenses 351,635 354,037 379,993 394,538 _.._ —■— ■— ; : —- Netproflt 279,827 333*087 312,275 289,803 ■ . The abbve net earnings were, digposed of as follows: Diy. ajid 1925 1926 1927 1928 bonus -r- " ■ ■ o .. ■ • 14 p.c. ..208,686 277,741 280,000 280,000 W./Off '■ premises 40,000 20,000 20,000 10,000 Pension fund ... 9000 10,000 9550 10,000 Reserves 10,000 20,000 ~- , — Increase : ■ m "carry- ■. .-... . forward". J^_^_J^_^L. 279,827 333,087 312)275 300,000 Decrease In "carry forward" «-i:. — — 10,197 ———•,-.: • .•■■'■>■ '• 289,80

In using either of the, above sets of figures, it has to be reriierhbered that they are, made-up i fi?Eythe year ending, March'-31, .^and therefore /.cover pine months'trgaihg of the preceding year. " Thus the. gross profits shown atf earned for ,1927 ''iwerev mostly earned,ip\ 1926, while those 'shenyn for 1928 w.ere earned principally m 1927. Comparing: the figures .shown for 1927 and 1928, the:, latter show a crease m gross" earnings of £7927, whilst the expenses increased - by ,£ 14.5,45, thus reducing the .net profit for the period by £22,472, the amount being £289,803. . ■ .Notwithstanding the', decreased W eartilrigs, the directors recommendl: et j;:. the. ÜBUa, divfdent| if 12 p>r y cent,and bonus of 2 percent. V'-v:^,,,;'' .... ':'■■- Also was written =off.pre. mises^. account and ilO.OOO^wae transfe«jf|d to the .pensions and.gratuities »■JJutf ut l * S^*o^, .^ J^S divided net profits brought forward from the previpUß year were drawn on WtfJW. «xtent of £10,197. _ ■ . = -.-. \The "omin*} f^fVo^^^ bank Is *ft mi lions, divided into 800,000 shares of £7/10/-/ each, upon which has been Pa W £2/10/--equal to, £2 mil lions of Paid-up capital, so that shareholders' liability remains at £4 millions.. ..: "The disposed reserve is £2 millions and.the undivided balance m. the profit and loss account is £165,572.. • ~ The. raarkef price oFt|ese £2/10/--paid shares is round £7'and the return is thus slightly under :£5 per cent, per annum. .. "Fiat Lux, believes' these sharers *? be a really sound investment, since the bank is most ably managed and- is following an enterprising and progressive policy, it.has ample .resources to take full advantage of the rising tide.of prosperity m the country and its earnings for the next few years should show substantial progressive, increases .which must enhance share values. ',''■:'.'■-.<',' :. * •■ -•■/ ", y ':':- '"•-''■•;. ':"V -■ '.. ■^~rp. ~ ■••■• •: ■ ■•.-.''■ ~ .s'■•■'*,' v^ f VALUES :^> ■-■■;- ■■ "■• ■•■■■ ■; - Tour dwelling, business premises, and plant would cost a lot moje if they had to be replaced to-day. Values change—so do. risiks.: One disastrous • fire may wipe put the effort \and sacriflee of twenty years! A, g66'd idea is to have your Fire Policies reviewed, m the light 6f . present-day conditions, The Mercantile and General Insiirance Co., Ltd:, transact Flrie, Marine and Accident Insurance. This New Zea-land-owned Company settles claims promptly. Head Office: Panama St., Wellington. Tel. 40-561. Branches and Agents everywhere. Subscribed 'cap! -■ tal, £250,000.* ' . ■ . .r. —■. '■■■ :; ■■„- , MOIITGAGIES BOUGHT Will 'bWrdrv lehdubn "Mortigages; Bonds, Shares, Fixed Deposit Itecelpts, Securities any kind. Apply agents for purchaser... . , ;;: ...... „ .■( ■!N.a*'.o.n?'--''nY*?^ m *nfe'vP.»g/^tjß-.>\'---i:i.-;Y 3'''Hiiada^'r^H«^iJ^a^i~--'W^l(o>i>*'j'