THE BANKS RETURNS

Taranaki Daily News, 10 April 1928, Page 15

THE BANKS RETURNS

SUBSTANTIAL RECOVERY J ) I ’ MARGIN OF £3,888,000 SHOWN. I , FIXED DEPOSITS AT NEW RECORD. , Wellington, April 6. A notable improvement in the banking position, in comparison with that existing a year ago, is revealed by the return covering the aggregates of the average statements for the March quarter issued by the six banks trading in New Zealand. The returns, which represent only their New Zealand business, disclose an excess of deposits over advances of £3,887,925 as against an excess of advances of £5,271,996 in the first quarter of 1927. Taking the three classes of deposits and comparing the figures with those for last year, the movements have been

The remarkable feature is the huge expansion of fixed deposits. The increase in the free deposits is trifling in view of the improved trade position. The figures for March are not available but for the two months of January and February there was an excess of exports over imports of £8,100,949, while for the 12 months to the end of February the excess of exports totalled £8,897,716, but in the previous 12 months the imports exceeded the exports by £2,115,088, so that the latest 12 months shows the wonderful improvement of £11,012,804. Yet with this excellent expansion the free deposits, which represent spending power, increased by only £41,373. DISTRIBUTION OF DEPOSITS. Th© following tables show the movements in deposits held by the various banks: DEPOSITS.

Totals .. Z1,0®8,034 25,47«,144 4,355,110 The great increase in the fixed deposits shows that by offering a high | rate of interest in competition -with other deposit seekers the banks have been able to attract a large volume of money and' holding these deposits, they can offer accommodation to customers quite freely. Whether there will be an increased demand for advances remains to be seen, but in view of the heavy decrease shown by the returns there is not much prospect of an increasing demand unless domestic trade shows an improvement. As the banks hold larger amounts in deposits than a year ago and the demand for accommodation has slackened, they may reduce the overdraft rate in an effort to stimulate trade.

The aggregates of the free and the fixed deposits for the Marell quarter of the last five years are as follows: March ,

The total is greater than in any of the previous years recorded. MOVEMENT IN ADVANCES. The advances show a decline of £4,373,714, as compared with the March quarter of 1927. This was inevitable, in view of the shrinkage in imports and the depressed state of internal trade. All the banks shared in the decrease as

In addition, there was a reduction of £358,724 in discounts to £1,504,895. In the March quarter of the two previous years, tank advances exceeded the aggregate of the free and fixed deposits but in the quarter just ended the ,-isition is reversed and the deposits exceed the advances by a substantial I SEiount. Following is a comparison for successive quarters of private deposits and bank accommodation:—

War.. 3SOB 40,M5,285 48.070.970 3,887,925 PUBLIC SPENDING POWER. The note circulation averaged £6,376,868, showing a contraction on the year by £270,013, against which coin and bullion £7,867,459 show a reduction of £7584. The public purchasing power, as shown by the free deposits and the note circulation, has varied as follows

The spending power of the community was contracted during the second half of last year, but there has been a substantial recovery in the latest period. Comparison with the position a year ago appears less favourable, but since the beginning of last year the position has been affected by the remarkable development of feed deposits, largely at the expense of free deposits, and a considerable proportion of the former are probably fixed for only the miniinnm period ■ ' . i

NEW RECORD OF FIXED DEPOSITS. RATIO OF FREE CLASS HIGHER. The increase in feed deposits creates another new record. The return for the September quarter showed a total of £23,398,246, which was not only the highest in the Dominion’s history, but for the first time exceeded the amount of free deposits, the difference being £1,582,742. The December return showed a further increase in fixed deposits to £24,280,160, the excess over free deposits rising to £2,859,263. The new record of fixed deposits is £25,476,144, but this exceeds free deposits by only £993,993. Of the total private deposits shown in the September quarter return, 48.25 per cent, were free deposits. In December the proportion was 46.87 per cent., but owing to the Increase in free deposits their proportion has risen to slightly over 49 per cent.

as follow:— Govt. «... Free Fixed .... Meh.. 1827. Meh., 19-28. Increas. £ 3,0-95,271 24„440,77® 21,08®,€34 £ 2,3(78,577 24.4812,151 25,470,144 £ ♦710,094 41,373 4,388,110 Totals 48,624,883 5-2,336,872 •Increase, 3,712.789

BaDik N. Zealand Union .... N.S. Wales Australasia National .. Commercial Meh., 1027. Meh., 1«®8 Increase £ .. 11,606.489 . 2,884,090 .. 2,493,840 2,311,558 . 4,213,491 931,310 £ 11,502,643 2,838,375 2,589,491 2,473,118 4,148,062 930,462 £ ♦103,846 ♦45,715 95,651 161,560 *65,429 ♦ 848 Totals .. 24,440,778 24,482,151 ♦Decrease. FIXED DEPOSITS. 41,373 Bank. Mar.. 1927. Mar.. 1928. Increase. £ £ £ K. Zealand 10,677,398 12,545,565 1.868,167 Union 2,396,636 2,827,472 430,839 N.S. Wales 2,791,255 3,323,768 532,513 Australasia . 1,708,115 2,207,672 499,557 National . . 3,136,494 4,040,592 002,098 Commercial 376,169 •531,075 154,936 ■■ - ■ ■ ■ ■ - —

Quarter, Free. Fixed. Totals. £ £ £ 1924 . . 28,436.163 18,597,130 47,033,293 ms .. . 29,765,517 20,13-1,711 49,897,228 1926 .. . 26,865,851 20,436,629 47,302,480 1027 . . 24,440,778 2.1,088,034 45,528,812 1028 .. . 24,482,151 25,476,144 49,958,205

appears in the following table:— March, March, DeBank. 1037. 1928. crease. £ £ £ N. Zealand 21,362,809 19,616.035 1.736,774 Union 6/170,913 5,277,741 893,172 M.S. Wales . 6,253,709 5,878,206 375,503 Australasia 4,884,098 4,554,655 330,041 National .. 8,-8)28,880 7,974,072 854,808 Commercial . 1,448,18-2 1,264,766 183,416 Totals .. 48,939,189 44,565,475 4,373,714

Quarter. Deposits. Advances. Excess of Advances. Dec., 1®C« 44,236,650 51,273,211 7,035,561 Mar., W 45,528,812 50,800,806 5,271,906 June, 1«27 46,480,366 50,752,106 4,262,740 Sept., l®27 45,213,750 4®, 315,231 3,601,481 Det., 3027 45,701,057 40,759,664 4,058,607 Excess of Deposits.

during the last five .quarters.:Totals. Quarter. Deposits. Notes. March . - . 24,440,778 6,603,381 31,044,459 June .... .. 24,741,202 6,587,002 31.328,264 Sept. .... ..21,815,504 0,1279,329 28,094,831 Dec. .. ,21,4*20,897 6,570,061 27,900,958 March ... . .24,482,151 0,370,668 30,858,819