Banking North of the Tweed

IN examining the figures of the Scottish banks not merely for the past year but for a series of years it is impossible not to be impressed with their remarkable steadiness both as regards the figures in the balance-sheets, and profit-earning power. Admittedly the Scottish banks are very soundly managed, but so are the English institutions. I am inclined, therefore, to attribute the greater steadiness of the figures of the Scottish institutions to the fact that they have been somewhat less affected by the acute depression in our staple industries which, South of the Tweed, has been responsible not only for a reduction in loans and advances, but also for situations which have involved frozen credits and often actual heavy losses too. Then I think something must be attributed to the fact that years ago when English banks were lending freely the Scottish banks applied a greater proportion of their resources to investment securities than was applied. by English bankers. In later years there has been a greater disposition on the part of the Se'ottish banks to use their resources more freely in the furthering of trade activities, but I doubt if they were saddled to the Same extent as some of their English ealtfrires with frozen credits arising out of loans made (hiring the prematUre post-War boom round about 1920.

Darosrrs.

1930.

£

1931. 1932.

£

Bank of Scotland (Fel?. 28) 32,258,308 32,585,468 30,828,263 British Linen (Jan. 15) .. 26,811,000 21,666,844 25,905,370 Clydesdale (Dec. 31) . • 30,229,868 28,219,064 32,000,899 Com. Bk. Scotland (Oct. 31), 33.182,352 32,112,042 37,502,627 Nat. of Scotland (Nov. 1) 32,266,197 29,077,192 33,867,668 N. of Scotland (Dec. 31) .. 20,082,403 19,704,992 22,036,621 Royal of Scotland (Oct. 8) 50,387,090 49,416,138 55,899,000 Um of Scotland (Apr. 2) .. 28,262,507 29,133,282 28,305,208

254,079,725

247,865,022

266,345,656

LOANS AND ADVANCES.

1930.

£

1931. 1932.

Bank of Scotland (Feb. 28) 17,852,283 16,722;003 15,080,934 British Linen (Jan. 15) .. .14,207,355,

1'13,130,599

.11,500,940 Clydesdale (Dec. 31) .. 14,726,232 14,422,130 12.347,426 Corn. Bk. Scotland (Oct. 31) 18,548,168 16,808,628 16,015,635

Nat. of Scotland (Nov. 1) .

13,759,909 13,477,966 13,068,364 N. of Scotland (Dec 51) .. 11,168,535 9,610,803 8,329,961 Royal of Scotland (Oct. 8) 23,662,571 22,815,586 22,711,940 Un. of Scotland (Apr. 2) .. 14,602,249 12,762,204 /2,079,924

128,527,302 119,739,921 111,735,124 *Including bills discounted and British Government Treasury Bills.

From the foregoing it will be seen that while there was a decline in deposits in 1931 the shrinkage was less pro- nounced than it was with the English banks, but on the other hand, the rise of nearly £20,000,000 which has taken place in the figures of eight Scottish banks during 1982 was pretty well in proportion to the advance which occurred M the deposits of the banks south of the Tweed. As regards the Loans and Advances there has, of course, been a decline during the year similar to that recorded by the English banks, though in the case of the Royal Bank of Scotland the decline is insignificant.

It is in the matter of earning power, however, that the returns of the Scottish banks exhibit remarkable steadi- ness. In the case of each of the banks mentioned in the statements given above there was a shrinkage in profits for the past year, but in many cases the decline was very small, white with the single exception of the North of Scotland, where the dividend was reduced from 17 to 10 per cent., the dividend distributions were at the same rates as a year before. Even in the case of the Bank of Scotland, where the fall in profits was considerable and the balance carried forward was materially reduced, the dividend was maintained at 18 per cent. In the case of the Commercial Bank of Scotland, the National of Scot- land, the North of Scotland, and the Royal the reductions in profits were quite trifling. Altogether I consider the Scottish banks must be congratulated upon the statements published at the end of a very trying year.