The Telephone. WITH WHICH IS INCORPORATED THE POVERTY BAY STANDARD. PUBLISHED EVERY EVENING. GISBORNE, FRIDAY, NOVEMBER 7.

Poverty Bay Standard, Volume I, Issue 280, 7 November 1884, Page 2

The Telephone. WITH WHICH IS INCORPORATED THE POVERTY BAY STANDARD. PUBLISHED EVERY EVENING. GISBORNE, FRIDAY, NOVEMBER 7.

The following article illustrating the magnitude and profits of Australasian banking is taken from the October number of 77ie Australasian Insurance and Banking Record:— Without going back many years to illustrate the great strides of Australasian bank ing we now place in juxtaposition the capital supplied to the public (being the difference between the bank’s colonial assets and liabilities), at three annual periods:— 30th June, 1882. 30th June, 1883. 3uth June, 1884. £20,163,820 £26,256,408 £20.359,653 The amount lent by the banks, in excess of the amount borrowed in the colonies, in 1882 was £2,789,997 in excess of 1881. In 1883 it it was £6,087,648 in excess of 1882, whilst ,

this year the banks' local borrowings and lendings have maintained so even a relation to each other that the additional capital supplied in the twelve-month is only £103,185. The plain construction of this is, that the additional money lent by the banks to the colonists in the year ending 30th June, 1884, viz., £5,767,854, consisted mainly of the additional amounts borrowed from the colonists in the same period, viz., £5,664,669. This would imply (1) growing local resources; (2) bank caution, and, (we suggest With deference) (3) an obligation on the banks to increase their own capital in order to meet the growing wants of borrowers. To our comparative tables there are two drawbacks; The Oriental Bank’s figures have disappeared from the general banking accounts at 30th June last; and we think that, in the returns of liabilities, some banks include amongst their local deposits, moneys which they have borrowed in Great Britain.

Let us see how the banks’ own capital and reserves compare with each other year by year, and also how they contrast with the increased capital supplied to colonial borrowers as shown above: — June 30,*82. June 30/83. June 38/84. Bunks' capital and reserves .. £19,304,717 £20,484,867 £21,041,439 From this it appears that 1883 showed an increase over 1882 in the banks’ own money of £1,119,650, and that 1884 showed an increase over 1883 of £557,072, but as in 1883 the Oriental Bank’s capital and reserve represented in our total banking accounts £810,604, the ratio of progressive increase by the other banks is more than maintained.

That the banks are of late years relying for their lending power on money borrowed outside the colonies becomes apparent when a comparison is made between their own actual resources (capital and reserves) and the amount they supply to Australasian borrowers in excess of their Australasian liabilities. Thus: — Excess of capital lent f 30th June, 'B3. 80th June, 'B4. over capital owned £5,772,101 £5,318,214 These figures represent the amounts presumably borrowed abroad in the respective years for use in our colonies. Profits show results which must be gratfying to bank shareholders. June, 30, 'B2, June 30, 'B3. June 30, ’B4’ Reserved .. profits.. £5,229,866 £5,808,516 £6,338,392 Amount .. divided £1,596,044 £1,752,516 £1,849,552 Average .. rote of., dividend percent. £lol3s. 4jd. £ll Bs. Od. £l2 12s. sd. If there be any other group of banks in the world which can show better or equal progress, we would like to have a record of their performances. We think, however, that an improvement of 2 per cent, in two years in the average rate of dividend, indicates the ability of our banks to undertake the administration of increased capital of their own. In one of our statistical tables is clearly set forth the banking business in each of the seven Australasian colonies, with the total business of each bank—the total business representing the aggregate of advances, deposits, and bills and notes in circulation. (It does not include amounts involved in bank premises or coin), viz.:—

The most noticeable point here is the increase of banking business in Queensland, which in the order of amount has now passed South Australia, all the other colonies maintaining the respective positions they previously occupied. At 30th June, 1882, the volume of Australasian banking business was £148,470,929; at - the same date in 1833 it was £162,345,002; being an increase of £13,874,073, or nearly 9.J per cent, on the year; at 30th June, 1884, it was £172,007,852. This is an annual increase of £9,662,850, or nearly 6 per cent, on the preceding year. Or taking 30th June, 1882, as a starting point, the increase over that year’s business is now £23,536,923, and the percentage of growth in the period is nearly 16 per cent. We have only to add that these figures understate the facts, as some of the banks have branches in colonies outside that in which their head offices are, and when notes are not issued at these branches, they do not furnish returns, which would swell the aggregate. Distant readers must also understand that none of the figures quoted include the large transactions of the Mortgage and Finance Companies direct with their customers, nor those of the savings banks or building societies. They do, we think, demonstrate the progressive magnitude and profits of Australasian banking.

Victoria. June 30, ’83. £52,229,734 June 30, ’84 Increase. £55,507,892 £3,278.158 New South Wales 48,934,989 51,446,489 2,511,500 New Zealand.. 25364,988 26,107,195 942,207 South Australia 15,133,663 15,402,571 288,903 Queensland .. 14,108,293 15,647,688 1,539,395 Tasmania 5,514,776 6,400,813 856,037 Western Australia 1,248,559 1,495,202 246,643