928 



Review of R 6view8, II 11/ is 



FINANCIAL AND BUSINESS QUARTER. 



CONDUCTED BY ALEX. JOBSON. A.I.A, 



THE COLONIAL BANK OF AUSTRALASIA LTD. 



There are several features of special 

 interest in this bank's report for the 

 September, 191 3, half-year. The one 

 which will most strongly appeal to the 

 shareholders is that the net profits of 

 ;!{J'29,iio are the largest yet admitted. 

 Not that the excess over the past few 

 periods is a large one, the net earnings 

 being only i^io8 better than those of 

 March last, and ^178 greater than those 

 of September, 191 2. But the point is 

 that they are larger. Moreover, being 

 larger, they indicate that the jump of 

 over £^3000 shown by the earnings in 

 March, 191 2, was not a passing ohase, 

 but the beginning of a more profitable 



period. 



• • * 



The improvement was not, of course, 

 such as to warrant any change in the 

 appropriations of the profits. These are 

 the same as usual. The preference and 

 the ordinary shareholders each receive 

 7 per cent, per annum for the half-year, 

 absorbing £iS>37S> ^^^ reserve fund is 

 increased by i 10,000 to ^^'210,000, and 

 ;^iooo is given to the Officers' Provident 

 Fund, This distribution leaves ^^27 35 

 to be added to the profit and loss ac- 

 count, making it ^^6630. 



Another interesting feature is that the 

 proportion of liquid assets to liabilities, 

 which stood at 33.8 per cent, in Septem- 

 ber, 191 2, is now over 35 per cent. This 

 ratio, it is true, is not as large as that of 

 46 per cent, current in March, but then 

 the bank usually holds more in liquid 

 assets in March than it does in Sep- 

 tember. The two periods are not com- 

 parable, chiefly because of the incidence 

 of business. But taking the full year 

 there has been a growth of over ^^3000 

 in the liquid assets of nearly ;^i,425,900. 

 Not a great deal certainly, but still an 

 upward movement ; moreover, supported 

 by a reduction of over ;^i 42,000 in the 

 liabilities to under ^^4,063,000. 



This decrease in the liabilities was 

 mostly m the Government deposits, 

 chiefly due to the withdrawal of the 

 Federal account. The effect of the 

 drain on this account, over /^ 102,000, re- 

 ducing the Government deposits below 

 ^^405,000, was made heavier by a shrink- 

 age of ;£^5 1,000 in the bills in circulation 

 to ;^302,ooo, and a decrease of ;£"33,ooo 

 to ^^629 in the balances due to other 

 banks Some of it, however, was neu- 

 tralised by a growth of nearly ;^47,ooo 

 in the public deposits to over ;^3,334,ooo. 

 This last feature is rather more impor- 

 tant than either of the others, indicat- 

 ing as it does a growth in the bank's 

 business. The necessity of finding the 

 funds to meet the above outgo presum- 

 ably caused the directors to restrict their 

 advances somewhat. This asset accord- 

 ingly decreased by ;iC^i 20,000 to 

 ;^3. 106.000. Com])ared with March last 

 there was no decrease at all, but an 

 increase of over ;^255,ooo. That, how- 

 ever, is not of much importance for the 



two periods are not comparable. 



* ■« # 



A further gratifying feature in the re- 

 port is that the security offered to the 

 public has been increased. A year ago 

 there were ^115 2s. of assets per i^ioo 

 of liabilities, whereas the decrease in 

 obligations to the public, combined with 

 the increase of over ^20,000 in the re- 

 serves, has increased this proportion to 

 almost £1 16 3s., which affords quite a 



satisfactory margin. 



* * « 



The preference shares of this Bank, 

 of which there are 31.184 paid to £g 

 15s., are selling at £]i los., cum divi- 

 dend, yielding 6 per cent, on the cur- 

 rent rate of dividend 7 per cent. |3er 

 annum. The price of the ordinary shares 

 (77,278 paid to £1 15s., with an uncalled 

 liability of £2 los.) is at the time of 

 writing 36s 6d.. also cum. dividend of 

 7 i^er cent, per annum for the half-year. 

 The return in this case is not quite 7. 

 per cent 



