Bevii w oj Review?, / U < 



8,i ; 



FINANCIAL AND BUSINESS QUARTER. 



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



UNION BANK OF AUSTRALIA LTD. 



There is not a great deal to be gained 

 from the published accounts of this 

 bank concerning the movement of the 

 earning power from time to time. The 

 directors for years have adhered stead- 

 ily to the policy of admitting only so 

 much profit as is required for dividend 

 and reserve purposes. In February, 

 191 3, half-year (the accounts for which 

 are now to hand) the net profit shown 

 was about £155,600, within £100 of that 

 admitted in August, 191 2. Practically 

 the whole of this sum was required for 

 the current appropriations, for the half- 

 yearly 14 per cent. p.a. dividend ab- 

 sorbed £105,000, while £50,000 was 

 transferred to the reserve fund. Though 

 there is no definite grounds for the as- 

 sumption, it is not improbable that the 

 half-year's earnings were rather better 

 than this, and that the inner reserves 

 benefited accordingly by the surplus not 



disclosed. 



* * * 



The position so far as the liquid as- 

 sets is concerned improved somewhat 

 during the half-year, for the amount 

 now held is almost £10,500,000, which 

 is about £330,000 more than the August, 

 191 2, figure. At the same time it is 

 £250,000 less than the sum held for the 

 previous half-year. This, of course, on 

 the year is not of much importance, for 

 the deposits and other liabilities fell 

 away by about £1,400,000 to less than 

 £24,080,000. The proportion of liquid 

 assets has accordingly risen, and in Feb- 

 ruary last represented 43.5 per cent, of 

 the liabilities as against 42 per cent, of 

 the year before. In regard to the ad 

 vances there was only a slight reduc- 

 tion in the half-year, though on the full 

 year the decline aim muted to over 

 £970,000. The present total, about 

 £16,230,000, is not as much as mighl 

 have been expected, for 111 the February 

 period the advances usually rise above 

 the August total. The depressed condi 

 tions in the February half-year are prob- 



ably responsible for the failure to re- 

 iver. 



Some idea of the bank's inner 

 strength, but certainly only a faint one, 

 may be gathered from the statement 

 which the chairman made to the pro- 

 prietors at the meeting in July. He said 

 that in regard to that proportion of the 

 liquid assets which was represented by 

 investments, nearly £i,8oo,oco, there- 

 had been " a severe drop in the value of 

 securities generally, and to-day our own 

 investments show some depreciation on 

 the prices at which they stand in our 

 books, for which depreciation, however, 

 your directors have made full provi- 

 sion." Needless to say he did not men- 

 tion the extent of the drop, but whatever 

 it was, the bank's inner reserves were 

 presumably of sufficient strength to meet 

 it without much inconvenience. 

 * * * 



It should be noted in respect of the. 

 above reduction in liabilities that by far 

 the greater bulk of it was in the August, 

 191 2, period. Taking the deposits alone, 

 there was a distinct improvement of 

 nearly £250,000 in the February period 

 Still iv would not do to look for anv 

 great rise during the current half-year, 

 for judging by the banking averages 

 the June quarter the deposits for the 

 whole of the banks have still maintained 

 a downward movement, for the average 

 was rather lower than that of the March 

 quarter. 



I here was no greal change in the 

 position of the bank (hiring the half year 

 in respect t< 1 the security it of] 

 deposit* In Augusl last the bank 



I £l 12 IOS. 3d ets per £lOO I1.1 



bilil ies, w Inch proportion was only 

 0(1. higher in February, 1913. This im- 

 provement necessarily was due to the in- 



in the reserve to 

 i, with the share capital 

 and |( 



