THE BANKING POSITION.

Taranaki Daily News, 10 April 1928, Page 8

THE BANKING POSITION.

That the present season has been, on the whole, One of bountiful production is indicated by the banks’ returns for the March quarter. Higher prices for wool, an increased output of dairy produce, and more stable prices for frozen beef and lamb have assisted in the trade recovery which the banks’ figures indicate. During the quarter advances have been reduced by £3,689,000, and deposits have increased by £4,257,000. The increase in deposits is almost wholly due to the expansion in fixed deposits, the increase in free deposits for the year ending on March 31 being only £41,373. The reduction in advances is due to the restriction in imports which has been so marked a feature of the trading of the past twelve months, while the great increase in fixed deposits shows that the higher rate of interest offered by the banks has been successful in attracting a large volume of money. The position in regard to free deposits, which represent actual spending power, is not so satisfactory, though it is possible that with the shorter periods for which fixed deposits are accepted a good deal of money formerly at call is now included in the fixed deposits. Though the increase in free deposits for the whole year is small, the last quarter saw an improvement of £3,000,000 as compared with the one previous, and as a good deal of produce is still unsold, the June returns should show a continuance of the improvement in this regard. Put briefly, the position for the year is that deposits have' increased £4,429,000, and advances have been reduced by £4,730,000, an improvement of £9,160,000 as compared with the previous year. Though this is a much more satisfactory position than existed a year ago, there is still need for economy, in importations, and in public and private expenditure. At the same time, the banks’ figures constitute the most favourable financial review for a very long time, and are a remarkable indication of the Dominion’s recuperative powers.