COMPANY MEETING
WESTMINSTER BANK LIMITED
STATEMENT BY THE CHAIRMAN
FOLLOWING the procedure which was adopted last year it is my in- tention to give, in the form of this printed statement, the information upon the year's accounts to which the attention of shareholders should be particularly directed. The proceedings at the meeting will there- fore be confined to the submission of the customary resolutions to the shareholders present and to any discussion arising thereon.
In my statement to the shareholders last year I drew attention to the great changes brought about by the war in the country's economic life, and the year 1941 has but served to accentuate two of the main factors to which I then alluded. There has been an acceleration of the extraordinary war expenditure of the nation and necessarily, therefore, an increase in banking resources.
With regard to the first of these factors, it is Inevitable that war, in this scientific age, with its high degree of all form. of mechanisation, must make ever-increasing demands upon the nation's resources, and Government war exoenditure is, after all, only one side of the triangle of man-power, machines and money The payment out of the Ex- chequer for the past twelve months to the end of December last was £4,654 millions, and if we add to that the £4,01: millions expended for the 16 months to the end ot 1940, we arrive at the colossal figure of £8,665 millions to the end of 1941. It is of interest to note, by way of comparison, that the total votes of credit ;or the last war, inclusive of considerable loans to the Dominions and Allies, was approximately £8,400 millions.
As a corollary to such expenditure there was an increase in the deposit liabilities of the clearing banks, during the year to November last, of no less than £507 millions, compared with an increase of £437 millions for the previous 15 months. Increased resources created in war time and by war expenditure should, and in fact must, be made available in one way or another to the Government, and towards the end of last year the Treasury authorised the issue of Tax Reserve Cer- tificates by subscriptions for which certain tax liabilities could be anti- cipated, thereby making immediately available to the Government money which would not otherwise be paid unil the tax payments became'due. These certificates carry interest at the rate of 1 per cent. per annum, free of income-tax and surtax. There are indications that a liberal use will be made of this facility and, if this proves to be the case, then the growth of bank deposits will be correspondingly slowed down.
The deposit liabilities of this bank at the end of the year show an increase of some £60 millions, and certain alterations have taken place in our assets in consequence of this increase. Treasury deposit re- ceipts at L1091 millions show an increase of £591 millions over the corresponding figure for last year, and this, of course, provides a high degree of liquidity, notwithstanding a diminution in our bill portfolio of £20 millions. The liquidity items ii. the bank balcnce-sheet give a ratio to deposit liabilities of no less than 46.61 per cent.
The main interest-bearing assets, namely advances and investments, which respectively exhibit ratios of 24.84 per cent. and 31.67 per cent. to deposit liabilities have, during the year changed places for the first time in banking nistory in their order of precedence. Hitherto the ratio of advances to deposit liabilities was always hither than that of investments.
In the past year the increased resources obtained •rom an increase of £60 millions in deposits. together wish a reduction of £18 millions
in advances, viz., £78 millions in all, have found employment in a net increase in the liquidity resources of £42 millions and an increase in investments of £36 millions.
After providing for rebate and taxation, and apprOpriations to the credit of contingency accounts (out of which full provision for bad and
doubtful debts has been made), the net profit for the past year E. mounts to £1,189,696—a shrinkage of £120,933 as compared with last year's figure. This result may, in view of the heavy taxation, be considered ,:tisfactory, and your directors have been enabled to declare dividends at the same rate as last year, viz., 18 per cent. on the £4 shares (Li paid) and the maximum of 121 per cent. on the Li shares (fully paid), wide making the allocations, customary in recent years, of £3oo,000 to officers' pension fund and £100,000 m reduction of the bank pre- mises account, at the same time recording a small increase of £12,734 In the carry forward to £563,863
As shareholders are aware, our foreign auxiliary. Westminster Foreign Bank, Limited, has all its trading branches in Belgium and France, and I can add nothing to the statement which I made last year,
The figures for our affiliate, the Ulster Bank, Limited, are before you, and the profit for this year is £132,494 as against £134,616 for the preVious year. The progress of this healthy business is considered quite satisfactory.
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