THE BANK OF NEW ZEALAND

Taranaki Daily News, Volume LIV, Issue 304, 20 June 1912, Page 8

THE BANK OF NEW ZEALAND

ANNUAL MEETING-. THE CHAIRMAN'S ADDRESS. By Telegraph—Press Association. Wellington, Wednesday, j The annual meeting of shareholders ' of the Bank of New Zealand was held this afternoon, Mr. M. Kennedy, chairman, presiding. ANNUAL REPORT. The chairman (Mr. Martin Kennedy), in moving the adoption of the report j and balance-sheet, said:— Ladies and gentlemen,—l presume you will take the report and baWnee-slieet as read. I feel sure you will consider them highly satisfactory. I am glad to say that we have had a good year, the profits being the highest yet earned by the Bank in any yafar since its commencement in 1881. The directors are pleased to be able : to recommend the payment of a dividend on all the shares of the Bank, amounting to—on the ordinary shares, 15 per cent, for the Tear; and on the preference shares, 10 per cent, the statutory limit. There is no change in the paid-up capital of the Bank, which remains at £2,000,000'. Last year the Reserve Fund was increase to £1.000,000 by the addition of £200,000 from profits, and the directors propose to place a similar sum to the credit of the fund out of the profits for the year under review, making the total £1,200,000. With tb ■ amount proposed to be carried forwar .lamely, £40,587, the Reserve Fund and undivided profits will amount to £1,240,587; £500,000 of the Reserve Fundi is invested in British Government securities. Notes in circulation, which stand at £1,030,906, show ?.n increase of £53,720 as compared with the previous year. Deposits are less by £2,052,878 than the figures of a year ago. the decrease being ijue to reduction in Government credit balances which, in the last balance sheet, were abnormally high. Ordinary deposits, both fixed and free, show a satisfactory increase. Bills payable and other liabilities show a comparatively small fluctuation, being less by £71,037 than at March, 1911. Money at short call, Government and other securities in Lond'on stand at £3,316,159. This amount, as compared with the previous year, shows a decrease of £3,394,080, attributable to the reduction previously mentioned in Government balances and to the withdrawal of funds from London to meet the active demandl for accommodation in the Dominion. Coin and cash balances also show at a lower figure, the amount under this head, plus bullion, being £265,589 less than at March, 1911, the reduction in liabilities already referred to rendering maintenance of "the high cash reserve of last year uncalled for. I may point out that the totals under this heading, together with the amount of bills receivable and investments in the colonies, are equal to 55 per cent, (or lis in the £) of the total liabilities of the Bank to the public. Bills receivable, in London and) in transit, stand at £2,406,266, an increase of £111.045 on the figures of the previous year. Investments in the colonies are less by £72,763 than at March 31, 1911. Bills discounted are greater by £109,- , 439 and other advances by £1,729,633, as compared with the figures of a year ago, and now stand at £1,221,075 and £9,667,748 respectively. During the year there has been a i strong demand on the banks and other financial institutions in the Dominion for accommodation, and, although adopting a restrictive policy for some time past, we have, as the figures I have placed before you indicate, responded reasonably to the call. Our present policy is to maintain ourselves in a position to meet the legitimate requirements of our established connections and of the Dominion's industries and trade, Totals under the heading of "Assets Realisation Boated Assets" now amount to £136,356, as "against £216,354 last year. You will notice that the item, "Sundry Assets Unrealised!" has disappeared from the balance-sheet, practically all the Assets Realisation Board properties having been disposed of. Landed property and premises, afl'-r appropriation now made of £25,0 "I, stand at £420,538, as compared wUh i £423,789 at March 31 last year. The profits, representing the work of our jubilee year, show at £396,182, an increase of £40,911 on the profits of the previous year. After paying the £40,000 interest on guaranteed stock and making all necessary appropriations, including provision for the Banks' annual grant to the provident fund and bonus to the staff, as well as allocating the sum of £25,000 in reduction of bank premises and furniture accounts, the net profits for the year amount to £331,182, as compared with £295,270 last year. Adding the amount brought forward from last year ( £34,405) and deducting the amount of interim dividend at 0 per cent, on preference and ordinary shares paid ill December (£60,000), the sum available for distribution is £305,587. The directors now propose to pay a further dividend of 6 per cent, and bonus of 3 per cent, on ordinary shares (making 15 per cent, for the year), and a further 4 per cent, on preference shares (making 10 per cent, for the year). The total: amount distributed to shareholders will therefore bo tho same as last year, name-' lv, £ 125,000. Of the balance remaining, it is proposed to transfer, as already mentioned, £200,000 to the reserve fund and carry forward £40,587. GENERAL. The progress of the Bank since its reconstruction in 1.894 having been so fully put on record at our annual meeting last June, I need not enlarge upon it further than to note with satisfaction the rapid growth of our reserve fund, which in 1906 , stood at £81,294, ami to-day, after the j proposed transfer of the £200,000, will stand at £1,200,000. This accumulation i has been made practically in the course I of the last six years. I As a consequence of adherence to a cautious policy, the Banks' losses have ( been exceedingly light. It is this fact, ] coupled with the prosperity of the Dominion and the great expansion of settle- | ment and production that has taken ) place during the last eighteen years, that j has made this splendid; achievement pos-. ■ible. Indeed, it may be said that the prosperity of the Dominion during the |

voars referred to lm been reflected in the Bank's biilnin-e-shei.-t. \ou will be interested to learn that the undeveloped native lands in the North Island, alluded to previously at our meetings, have I); weiviiiff' the attention of the Govc-rnmeni since the passing of the Native Lands Act, 1909; so much so, that the Commissioner, in a recent address, assures the public the desired end will be attained within three or four years. Upwards of one million acres have already been alienated and! settled during the past two years, and further alienation and opening up will be proceeded, with as fast as surveys and roading can be accomplished. In like manner, the availablo Crown lands are receiving attention, with the object of bringing tliem into profitable use by lease or otherwise. Much of the native land is superior in quality and l covered with heavy bush. The difficulty of promoting close settlement upon such lands lies in the large amount of money required for roading and improvements. To a large extent, we have to look outside the Dominion for tli'' funds to carry out these works. If we had to depend entirely upon our own resources, development would be retarded for many years to come. The borrowing of money within reasonable limits, for the purpose of bringing such lands into profitable occupation and for acquiring other lands for close settlement, is fully justified. By such means, , openings will be made for numbers of immigrants—especially of the farming class with experience and small means, and farm laborers. It is to the at present undeveloped and unsettled portion of the North Island that we look, in the j near future, for any large expansion in the export tradie of the Dominion.

1 BOARD OF DIRECTORS. | You are doubtless aware that the , Board consists of six members, two rej presenting the holders of the ordinary shares and four representing the Govern- , ment, the holder of the preference shares. One of the two representing the ordinary shareholders retires yearly, and the vacancy is filled bv election at the December half-yearly meeting. Mr. Kennedy was re-elected in December last. Two of tho four Government appointees retire yearly and the vacancies are I filled!, in terms of the Statute, not later | than the first Wednesday of March in eacli year. List March,' Mr. Milne and Mr. Beauchamp's terms expired and, as you know, the vacancies were filled by the Government appointing Mr. W. Mil no and Mr. 1). J. Nathan. Advices received from Mr. Beauehamp in Lond'on had indicated that his health would' not permit of his seeking re-ap-pointment. Upon his retirement, the Board placed on record its high appreciation of the very valuable services rendered by hiiVi to the Bank during the thirteen years that he occupied a scat on the Board, and more particularly during the last five years when he filled the position of chairman. Mr. Milne's re-appointment gives us much pelasure; and Mr. Nathan's wide business experience and commercial tiaining will no doubt be of considerI able assistance to the Board in its I deliberations. ' We welcome back Mr. W. Watson, who was absent in London when our halfyearly meeting was held in December last. While in London, Mr. Watson attended several meetings of the London Board. I may mention that Mr. Watson s present term of office expires on March 31 next, and that it is his intention to offer himself for re-election. Of the original members of the Board who took office when the Bank was re-con-structed! in 1894, Mr. Watson and myself alone now remain directors. Mr. J. B. Reid is at present absent from the Dominion on a visit to Europe. During in London he will be associated with the local hoard in that city. - My colleagues have done me the honor of unanimously electing me to the position of chairman for the year. I need . hardly assure you that the best of my abilities will he devoted to the duties of the position and the promotion of the prosperity of the institution with which I have been now closely associated for nearly eighteen years, you 'having reelected me each alternate year during that period^unopposed. We have pleasure in again referring to the great care and attention bestowed upon the Bank's business in London by the members of the Board there. STAFF. It affords us pleasure to once more record our appreciation of the zeal and ability displayed by our staff in New Zealand, Australia, Fiji and Londlon. In view of the increased cost of living and of the greater responsibilities devolving upon the staff consequent upon the expansion of our business, the Board, at the annual revision of salaries, has dealt with the remuneration of officers on a more liberal scale than in former years. Tho Board has recognis'ed their good services by granting a bonus of 5 per cent, for the year on their salaries, and I feel sun; you will approve of our liberality. Much of cur prosperity is due to the zeal and ability of our staff. They have worked well, and it is only fitting they should bo encouraged CONCLUSION. In conclusion, I desire to remark upon the present gratifying state of the marfdr the staple products of the Dominion. Wool, frozen meat and dairy produce are all commanding satisfactory i prices, ami the outlook for the coming ■ s-eason in this respect is distinctly good. [ In the. Motherland and in Europe, wo find that political complications during tho year have given rise to many uncertainties and apprehensions as regards the future, and in Great Britain tho closing months have been marked by an industrial struggle tho seriousness of which has, I fear, hardly yet been thoroughly apprehended, but which there can be no doubt has resulted in the loss of many millions of money to the British , nation. Unfortunately, the end of such conflicts does not appear to be yet in sight (the strike of the Londlon transport workers being at the moment in progress and entailing a considerable amount of inconvenience and loss upon the mercantile community). British capital has, as a consequence of these disturbing conditions, been shy and sensitive, and the .London money market uncertain and in a state of tension. Owing to the combination of unfavorable conditions, to the shortening supply of capital, and to ■the steady expansion of our own industries involving a continuous demand for financial assistance in the development of tho country, a hardening tendency in

the local money market is at present be-» ill" displayed. 1. liave pleasure in moving that the report and balance-sheet be adopted. Mr. W. Wa! son seconded the motion for the adoption of the report. In a speech endorsing the views of the chairman, lie said he would stand for election to the directorate again in December. Mr. W. Milne congratulated Mr. Kennedy on his election as chairman and on the good report of the year's working. He also approved the Board's treatment of the stall', and said that the cost of living had gone up and officers had to wear their Sunday clothes every day of the week. The motion for the adoption of the report and balance-sheet was carried unanimously. A vote of thanks was passed to the directors and staff. In reply to a shareholder regarding the bank's obligation to the Government, Mr. Kennedy said that many shareholders were under the impression that the guarantee was money owini* to the Government. It was nothing of the sort. It was money due in London in guaranteed stock. Its redemption would not put any more money in the coffers of the Government. Still, the question of the renewal of the guarantee or paying it off to .be dealt with. If paid oft it would limit the bank's power of lending.