6 MAY 1938, Page 54


Since this is a Scottish issue we may usefully take the opportunity to glance at certain investment possibilities north of the Tweed. To take the Scottish banks first, I suppose there is no banking system in the world that commands more confidence among depositors and share- holders alike than this widespread network of 2,000 branch offices ranging from Cumberland to the Shetland Isles. First, in point of seniority, comes the Bank of Scotland, established by Act of Parliament in 1695. Recently, this bank has extinguished the uncalled liability on its stock by a transfer from reserves, at the same time issuing new stock at a substantial premium. Easily the largest bank, judged on the basis of resources, is the Royal Bank of Scotland, dating back to 1727. Its total resources -amount to roughly L86,000,000 ; ranking next to it is the Com- mercial Bank, with resources of nearly L60,000,000, followed by the Union Bank of Scotland, whose deposits amounted in January to over £31,500,000.

All these banks are independent institutions, while the remaining four, the British Linen, the National Bank of Scotland, the Clydesdale and the North of Scotland Bank, are affiliations of London -clearing banks. Last year the Scottish banks had a similar experience to the "Big Five" in that a moderate increase in deposits was accompanied by a substantial increase in advances, itself a reflection of the improvement in trade, especially in iron and steel, shipping and shipbuilding. This year I should expect to see this Movement carried a stage further, but I am also prepared to witness a Sliming down in the rate of growth of advances in the light of the recession now apparent in Certain sections of Scottish trade. Here are details showing

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FINANCE AND INVESTMENT (Continued from page 842) the kind of yields now -obtainable on Scottish banking shares :

Current Yield

Price. £ s. d. Bank of Scotland £i fully paid.. 67s. 6d. 3 ii o Royal Bank of Scotland stock .. 465 3 13 Union Bank of Scotland "A" £5 shares, Li paid 91s. 6d. 3 18 8 Union Li fully paid .. 98s. 6d. 3 13 These yields approximate very closely to those obtainable on comparable issues of the "Big Five" banks here, an investment rating which is _fully justified by the Scottish banks' strong reserves and shrewd management.

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