OTHER PEOPLE’S MONEY

Sun (Auckland), Volume 1, Issue 45, 16 May 1927, Page 2

OTHER PEOPLE’S MONEY

BANK PROFITS AND Tuc = RATE Ba Nk (By "BAROMETER.") The past decade has witness.* markable increase in the „ 4rt - > the Investing public Kenerall v U m ber ' the accumulation of canit u ° Wjlcgreater relative importance volume of tbeir immediate . One of the classes of inv which has therefore been the bank share, for which thk* • is ever increasing. Holders a/TS' shares participate from time » U,?! * in issues of new shares at 10 titt ' lower than the ruling marU, and often benefit by "m '' and absorptions. The shows the new issues nna. S "Nt Bank of Xew South Wales y > 1833: ”aiea site.

Undistributed profits enable distributions to be made, and now e spite the prosperity of the business generally the bank oveS?, 5 rate is increased because deS have lallen off to such an extern*? advances -exceed them hv ‘ £ 5.272,000. This excess is ath-H?®'' to the heavy importations and theT* cline in our principal items of emT and rightly so, but there is an - other reason that is sometime. , sight of and that is the low rate”'" interest that the banks have bw, ? lowing on fixed deposits. The invJ" mg public has grown considerablv*,.' ing the past few years, and the w' must realise that a bank share oTU surance share investment returning - to 51 per cent, free of income taxV far more attractive than a fixed * posit with a bank at n low rate tk" policy being adopted to entice a positors to “return to the fold" i, .‘ increased interest rate, but it is companied by a relative increase i the overdraft rate and it appear. . though they are “robbing Peter ton., Paul.” ** y The prosperity of the banking busi ness is exemplified by the following comparative tables, from which it £ difficult to find justification for a, increased interest charge on over draft. The following is a brief history of the four banks trading in New Ze-» land:

Y ear. Proportion. Price. 1S93 at 1907 . 500,000 (1 in 4) 1916 500.000 (1 at Par 1912 500.000 (1 in 6 ) at Par 1916 500,000 (1 7) at Par 1919-20 . 1,000.000 (1 41 at at Par 1926 62,500 (l in H) ♦Premium. Par Par

s •13 T3 — x _ ft t - fc.Q Year estab Origi paideapita Capitf up It* N.S.W. Union . 1837 268,930 3,500.000 1S7 N.Z. . 1861 108,785 6.154.9S9 J?i National . 1S72 1 83,334 2,000,000 S9 The total of New South Wales. £82.000.000: Uni,,-, £44.500,000; National, £ IS,471,719. XEff SOUTH WALES Paid-up 1916. 1921. 1926. capita! 3,705,320 5.000,000 6,060.000 Net profits 496,327 753,341 1.099.55! Dividend rate 10% 121% i«». Dividend amount 355,133 621,801 750.0 v, Reserves 2,830,241 3,650,923 4,880.315 Advances 27,649,720 35,980,612 48.017,14' Deposits 38,829,593 60.4S9.136 58,587,508 UNION BANK OF AUSTRALIA. Paid-up capital 2,000,000 2,500,000 3,500,WO Net profits 280,S64 496,340 627.611 Dividend rate 14% 15% ISfc Dividend amount . 280,000 375,000 525,W Reserves 2,031,373 2,833,056 4,295,513 Advances 19.0S5.373 26,766,010 26.77V.4: Deposits 24,055,7 8 4 2 9,531,558 32,038,3;: BANK OF NEW ZEALAND Paid-up capital 2.279,988 3,9<>4.989 6.154,389 Net profits 357,093 777,256 1,012,161 Dividend rate ordinary shares Dividend 15% 13% 13.6ft amount— total 254.350 412.500 712,15! Reserves 2,118,605 1.886,276 3,390,171! Advances 10,685,130 27,725,875 30,984.61! Deposits 23.556,676 34,475,655 31.121.26S NATIONAL OF NEW ZEALAND Paid-up Capital Net profits Dividend 750.000 1.000.000 2,04)0,000 143,529 326,821 3SS.M7 13'i 1474 114 Rate 97,500 140,000 _ 277.711 727.108 1.155.S94 2,173,(44 . 3,802,305 10,560,232 10,033,M Deposits 5,29S,296 8,296,492 10,438.46*