28 MARCH 1941, Page 25

compANY MEETING

THE HONGKONG AND SHANGHAI BANKING CORPORATION otorporated in the Colony of Hongkong. The liability of Members is limited !the extent and in manner prescribed by Ordinance No. 6 of 1929 of the Colony/

IMPROVED RESULTS MR. J. J. PATERSON'S REVIEW THE ordinary yearly general meeting of the shareholders of the Hong- kong and Shanghai Banking Corporation was held in Hong Kong on February 26th, 1941, the Hon. Mr. J. J. Paterson in the chair.

The Chairman said: After making full provision for losses and con- tingencies, the net profit for the year amounted to $13,999,869.99, In increase of about $7 lacs over the previous year After deducting the interim dividend paid at is. 2;d., and directors' remuneration, and including $3,411,329 55 brought forward from last year, there remains for distribution $10,876,745.77, which it is pro- posed to deal with as follows: To pay a final dividend of £2 los. per share, subject to deduction of income-tax, transfer to bank premises account $i,000,000, and to carry forward to new account $1422,964.26.

While there is no-very great change in the total of our balance- sheet, there are quite considerable changes in the individual items on either side. On the liabilities side there is a substantial increase of $72.000,0oo in current account balances, which is largely offset by decreases of $32,00o,000 in fixed deposits and $24,000,000 in bills payable. On the other side, holdings of cash and bills have increased by S32,000,000 and $52,000,000 respectively, against which securities and loans show declines of $3o,000,000 and $36,00o,000 respectively, brought about by the necessity of keeping a liquid position.

FAR EAST DEVELOPMENTS

During the year changes have occurred in Europe which no one meld possibly have foreseen. Our London office is carrying on un- scathed in the direct line of the war and the fall of France of course meant the withdrawal of the British members of our staff at Lyons; otherwise our branch offices have not been affected. Here in Hong Kong, in Shanghai and in Singapore, where our three main offices are situated results have been satisfactory in spite of abnormal con- ditions, and in other countries our branches have not met any serious complications, until recently in Japan.

Developments in the Far East have followed the course which careful observers foretold. One finds considerable difficulty in dealing with a single port like Shanghai; but one unhealthy feature stands out clearly. Shanghai last year imported from abroad large quantities el native products which the hinterland can normally provide. The Shanghai Foreign Exchange Market in 094o fluctuated between a high mark of 4.29-32 pence and fit's U.S. cents. The establishment of the new Central Reserve Bank in Nanking on January 6th, 1941, and in Shanghai on January 20th has made for uneasiness since it is !eared that further measures may follow. All the leading banking interests in the Far East lay stress on the importance of the continua- tion of the existing free market at Shanghai. Any rash action, pre- cipitating its closure or tending to its restriction, whether from Chung- bag or Nanking, might result in unfortunate reactions not only in Shanghai itself but also in China generally.

CHINESE MARITIME CUSTOMS REVENUE

The record revenue collection of the Chinese Maritime Customs has been welcomed perhaps too effusively by those who have not Studied the situation sufficiently carefully. Although a record in terms (I Chinese dollars, the figure of 475 millions represents only about millions at the average rate of the year, whereas the previous Year's collection of 331 millions was equivalent to about £81 millions, and the average value in sterling over the to years prior to the Sino- JaPanese conflict was no less than £19 millions.

Moreover, owing to the continuance of the Sino-Japanese conflict, the Position of the foreign loans has in no way improved in the past Yea, r. Quotas in Chinese dollars are still set aside by the National reniment in the Central Bank of China to cover their estimated 'wen of both the Customs and Salt Loans. These quotas are based 24 the proportion for which imoccupiet. China might be regarded as quotas were also provided for the occupied parts of China. It must be remembered that such sums are estimated by working out amount of Chinese dollars due, at the ,ormer official sterling rate Is. 21d. to meet scheduled loan payments. Actually the sums iced in the Central Bank of China last year averaged only about 't Per cent. of the sums so due.

As regards other countries, Malaya gives the brightest picture. Tin rubber exporters have had a very good year, and this has, of se, brought prosperity to the many concerns (including banks) are directly or indirectly concerned with these two important cts. In India conditions have been subject to fluctuations, but tly there has been a better feeling and confidence exists that trade situation will remain satisfactory, helped by war production etoPments which are now being hastened forward. 1e report and accounts were unanimously adopted