26 DECEMBER 1941, Page 18




THE I 16th annual general meeting of The National Bank of Scotland, Limited, was held in the bank's head office on December 18th. The Most Honourable The Marquess of Zetland, P.C., G.C.S.I., G.C.I.E., the governor of the bank, presiding. The governor said:

Turning to the statement of accounts before you, it will be observed from the profit and loss account that the heavy burden of taxation and other charges resulting from the war has had its effect upon the profits for the year, which show a reduction of sonic £17,000 at £262,000. These profits are arrived at after making full provision for all bad and doubtful debts as well as for all taxation, rebate and interest, and you will not be surprised to learn that Government taxation alone absorbs a sum greater than the net profit figures shown. Had it not been for the largely increased resources of the bank during the current year, which have yielded a modest return, the fall in profits would have been greater than it is. The results are therefore in the opinion of your directors very satisfactory To the profit for the year of £262 ova there falls to be added the sum of £88,000 brought forward from last year, making £350,000 in all, and from this total the board has made the following appropriations, viz.: To Investment Reserve Fund ... Lioo,000 Heritable Property Account 25,000 Trustees for Officers' Pension Scheme ... 30,000 Staff Widows' Fund ... 5,000 A total of ... £16o,000 Dividends which are recommended at the rate of sixteen per cent. per annum on the consolidated c...zpital stock and at the rate of five per cent. per annum on the " A " stock, which is held by the public, absorb, less tax, £98,000, leaving £92,287, which it is proposed to carry forward in the present year's accounts. The paid-up capital of the bank remains at £1,500,000 and the reserve fund stands at £2,000,000, apart from £19o,00o represented by the dividends payable in 1942 and the sum carried forward in profit and loss account.

THE BANK'S LIABILITIES When I last addressed you I commented upon the high figure at which the notes in circulation stood at November 1st, 194o, viz., £4,190,678, an increase of £9o0,000 over the figures at the same date in 1939. You will observe that the notes in circulation at November 1st last have reached the still higher figure of £5,280,862, an increase of more than £ i,000,000 during the year, a striking indication of the large sums being expended week by week mainly on wages in connexion with war work. The deposits likewise show a large increase at £50,806,000, the figures being higher than last year by almost £9,000,000, and this has taken place notwithstanding the considerable drain through the substantial support given by our customers to Government loans and War Savings schemes in War Weapons and Warship Weeks throughout the country. Acceptances, guarantees and other obligations on account of clients are slightly higher at £2,945,000.


On this side of the balance-sheet, cash, money at call and short notice, balances with the Bank of England and other banks, as well as cheques in course of collection, total £14,451,000, showing apart altogether from Treasury deposit receipts of £3,500,000 a thoroughly liquid position. The holding of other British Government securities has increased by £ro,000,000 during the year and now stands at £30,535,000. As mentioned in the report, the value of the investments held by the bank, at prices ruling at November 1st last, exceeds the figures stated in the balance-sheet. Advances on current and other accounts again show a fall and are just under £ro,000,000. Bills discounted, at £254,500, now represent a small and dwindling pro- portion of bank loans.

Bank buildings and heritable properties taken together appear at the substantially written down figure of £593,000. This sum does not include any expenditure in connexion with the new head office of the bank.

The balance-sheet figures have reached a new high level at £62,722,000, an increase of £io,000,000 in the year. As you will no doubt have observed, the higher resources at the disposal of the bank have all been utilised in furthering the financing of the country's war effort (first) by the support given to the various Government war issues, investments in Government securities being higher by £to,000,000 than a year ago, and (secondly) by an increase in the amount lent to the Exchequer by way of Treasury deposit receipts.

This brief survey of the bank's position speaks for itself and I need say nothing further with regard to the balance-sheet. In conclusion, but in no formal manner, I am asked by the directors to express to the staff, permanent and temporary, the agents of the bank, the managers of the London and Glasgow offices, and the executive officials at head office, their sincere thanks for and cordial appreciation of the devoted service they have rendered during a year of increasing burdens and difficulties.

The governor concluded by moving the adoption of the report and the payment of dividends at the rate of 16 per cent. per annum less tax on the consolidated capital stock and of 5 per cent. per annum less tax on he " A " stock.

The governor, deputy-governor, extraordinary and retiring ordinary directors were re-elected and 'he auditors re-appointed for the ensuing year.