LONG-TERM LOANS

Sun (Auckland), Volume 1, Issue 25, 21 April 1927, Page 7

LONG-TERM LOANS

BANK OF N.Z. OPERATIONS NEW MORTGAGE DEPARTMENT Loans averaging £25,823 for the quarter ending March 31 are shown in the first account of operations of the new long-term mortgage department of the Bank of New Zealand, published in the Gazette. The statement of assets and liabilities shows capital as £307,354, while loans amount to £25,823. The balance or £251,531 is shown as “ transfers to bank.” Under the empowering Act, any portion of the long-term mortgage fund which may not be immediately required for loans on mortgage may be transferred to the ordinary fund of the bank, which is to allow the fund interest at not less than the rate for three months’ deposits. The bank’s decision to issue 703,125 shares, half the authorised amount, was announced at the end of September. Two-thirds of the issue, 4b5,750 D shares, were offered to ordinary shareholders and one-third, 234,375 C shares, to the Government, the first instalment of 5s being payable on December 31, and the balance by equal instalments at intervals of six months. These shares carry fixed preferential but non-cumuiative dividends of 6 per cent, on the C shares and 7* per cent, on the D shares, and the bank offered to pay 5 per cent, on instalments paid in advance of due dates. The public accounts for the December quarter show that the Government paid only the first instalment. £55,593 15s, on its shares, so that unless the bank has issued any debentures —which it may do up to three times the amount of

paid-up capital—many ordinary shareholders must have paid their shares in full. The balance of £307,354 over the first instalment is equivalent to 15s a share on 172,097 shares. The amount of loans shown in the statement represents the average during the quarter—not the amount advanced at March 31.