21 JANUARY 1928, Page 32


In tour annual Banking Supplement, _Which will appear later on, we shall hope to deal in detail with the banking results for the past year. Special reference, however, must be made on this occasion to the fact that the Report of the Midland Bank was accompanied by the announcement of an increase in the share capital. It is proposed to offer to existing shareholders new shares of £1 each, fully paid, in the proportion of one new share for every 120 of paid,up capital, the premium of $1 to be credited to the Reserve, The allot-- meat will be made to all shareholders on the 'register on the 29th proximo. It may Pe recalled that the creation of 5,771,052 shares of /1 each was authorized in April, 1925, and up to the present 688,908 of such shares have been issued. When the increase of capital now proposed is completed, the paid-up capital of the bank will have beemmised to £13,800,000 and the Reserve Fund to a similar amount. This tendency gradually, to increase the share capital Of the banks is in accordance with the indications I gave hi these columns a few weeks ago, and I am very glad to observe that expectations are materializing, for in view of the great post-War expansion in deposits it is undoubtedly desirable that the proportion of capital to liabilities should -be raised. Moreover, while the new capital is issued on terms constituting a bonus to existing shareholders, the procedure is at the same time in harmony with the general policy of placing a sound balance-sheet and the security of the depositors before any question of increased dividend to shareholders.