COMPANY MEETING

HALIFAX BUILDING SOCIETY

TOTAL ASSETS EXCEED £122,000,000 GRATIFYING INCREASE IN EARNINGS SIR ENOCH HILL ON THE SOCIETY'S PROGRESS THE results of the Halifax Building Society's year of big business were placed before the members' annual meeting in Halifax on March 28th, by the President, Sir Enoch Hill, J.P., F.C.I.S.

Addressing the meeting on the motion for the adoption of the accounts Sir Enoch said :

The total amount advanced upon new mortgages during the year was £20,943,616 6s. Id. For four consecutive years the loans by the Society have been maintained at the remarkable level of more than £20,000,000 per annum. Since its formation 85 years ago, the Society has advanced for home and property purchase no less than £277,084,479. The new borrowers enrolled number 33,795.

There has been an increase of £6,080,910 16s. od. in the amount due upon mortgage, and the total amount outstanding on mortgage sect r:ties is now £98,276,899 12s. od., the average amount owing per mortgage being only £410. The Society's Mortgage Accounts continue to be eminently satisfactory.

HIGH LEVEL OF LIQUID FUNDS.

The liquid funds, represented by investments in trustee securities and cash in banks and in hand, have been maintained at a high level and now amount to £23,634,393 2S. 4d., equal to 19.27 per cent. upon the total assets of the Society. The Investment Share and Deposit Funds have increased during the year by £7,783,560 7s. 9d., to a total of £117,089,819 2S. 4d. An increase of £8,298,431 4s. 7d. has been made in the total assets which now stand at £122,626,007 los. 7d. This is a very remarkable growth, in face of the fact that the Investment Departments of the Society have been very considerably restricted. This great increase is not entirely due to new business, because more than 3 per cent.. of the previous year's total has been added by the natural momentum of the Society's business on the principle of a snowball gathering increase by its progress.

New accounts opened during the year number 94,912 and the total number of Shareholders' and Depositors' Accounts oper at the end of the period was 712,414, an increase of 29,799 Accounts.

PROFIT AND APPROPRIATIONS.

The balance of profit for the year, after payment of all expenses and full provision for Income Tax, National Defence Contribution, and all interest due to depositors to the date of the account and fox depreciation of office properties, amounted to £3,034,531 13s. 2d., to which has to be added the balance brought forward from last year, namely, £67,34s 7s. tod., making a total of £3,101,874 Is. od., out of which the following appropriations have been made :

s. d.

Interest to Shareholders .. .. 2,473,217 to 3 Staff Superannuation Fund 5o,000 0 0 General Reserve Fund .. 400,000 0 0 £2,923,217 to 3 leaving a balance of £178,656 los. 9d., from which the Directors have allocated a bonus of los. per cent. to the Paid-up Shareholders, Class t, and a bonus of 2os. per cent. to the Monthly Investing Shareholders, amounting together to £112,488 16s. 8d., leaving a balance to be carried forward to next year of £66,167 14s. id. The above allocation is on the same basis as that of the preceding year and will make a total yield for the past year to the Paid-up Share- holders, Class t, of £3 15s. od. per cent. and to the Subscription Shareholders of £4 5s. od. per cent., the Income Tax on both interest and bonus being borne by the Society.

ADVANTAGES TO MEMBERS AND DEPOSITORS.

The Society's members and depositors can with every justification be congratulated upon the practical pecuniary benefits which they have derived from their association with the Society. In the year under review, interest and profit totalling £3,497,431 has been paid to or credited to the accounts of members, whilst in the last ten years the total sum of £30,366,508, Tree of income tax, has been received by or credited to, the Society's members and depositors as a reward for their thrift, and for their discrimination in the selection of the Halifax Building Society as the home of their savings. The total Reserve Funds and Undivided Profit now amount to £5,066,167 14s. id. This includes the Reserve Fund, No. 2, now amounting to £750,000, specially provided to meet any losses on the realisation of properties falling into the possession of the Society. Neither the General Reserve Fund nor the special Reserve Fund, No. 2, has been called upon to make good any such losses. These, as usual, have been borne out of the profits of the year, and they represented last year an almost negligible proportion of the mortgage interest earned, namely, less than 3d. in the £. It will be noted that the Reserve Funds are covered by the cash at banks and in hand.

REat. PROGRESS. A true measure of the real progress of the Society is obtained by contrasting the business of the p3st year not only with the previous 'Tar, but over a longer period. On the date of the amalgamation of he two Halifax Societies the assets of the combined societies amounted £46,981,482, compared with the present figure of £122,626,007, showing an increase in the to years of £75,644,525. The total number of open Accounts has increased in the same period from 329,224 to 712,414, or by more than too per cent. The total reserve funds and undivided profit on January 31st, 1928, amounted to £1,461,200, compared with the present figure of £5,066,167, an increase of £3,6o4,967 or more than 246 per cent. This is a marvellous addition to the society's strength. There is an equally gratifying increase in the same period in the earnings, which have risen from £2,862,917 to those of the present year of £5,263,114. The balance of the net profit, after meeting all the liabilities of the society, may be said to have become standardised at over £5oo,000 per annum. The society enjoys the distinction of being the largest institution of its kind in the world, and the directors and members are naturally proud of the magnitude of its business. The balance sheet shows that the assets represented by small mortgages under £5,000 each amount to 87! per cent. of the whole, and the large mortgages over £5,000 each amount to only I2i per cent. on the whole.

HOUSE PURCHASE ON CONVENIENT TERMS.

Out of the total of 239,147 mortgages, 191,632 are in respect of mortgages where the balance does not exceed £5oo, a fact representa- tive of the aim of the directors at all times to give every possible preference and encouragement to applications for advances for the purchase of small houses on convenient terms.

Every known facility within the bounds of prudence is offered by the society, and borrowers present and prospective are assured of helpful consideration in their applications. The object of building societies has from their establishment been a two-fold one, namely, to encourage thrift by providing the best return with complete safety and accessibility for savings, and to offer the utmost facility and assistance to the home buyer by way of an economic mortgage. How far that double object has been achieved is shown by the figures I have just quoted. A change in policy, however, has gradually been adopted by a number of prominent societies, owing to the disposition of the Government to encourage house tenancy rather than home purchase. Whilst retaining all the benefits for the encouragement of thrift and savings, societies have, to some extent, widened their basis of investment and have made loans upon group properties affording a greater margin of safety and supported by an adequate degree of owners' capital, generally on the basis of not less than one-third of the cost and coming within the range of trustee investments.

THE NEW HOUSING BILL.

If the new Housing Bill; now before Parliament, becomes law, Local Authorities will be faced with the task of building some 430,000 houses or residential flats within the next five or six years, to provide housing accommodation for those persons who are dispossessed through either slum clearance or overcrowding conditions. This duty should so fully engage the attention of our Local Authorities that they may well leave to private enterprise and the building industry the provision of small houses suitable for the requirements of the working classes or for letting at low rentals under the Housing Acts, 1933 36, or for purchase and personal occupation by the owner, with the direct assistance of Building Societies. I see no need whatever why Local Authorities or the Government should enter upon large schemes for building houses and letting them at an uneconomic rent to all and sundry, creating a great burden upon the ratepayer and the taxpayer. I regard it as nothing less than a tragedy that individuals who are well able to provide their own housing accommodation should be made a burden at the expense of others. There would be a great gain by the mobilisation of personal resources rather than by making a nation of tenants of State owned houses. The Society's allocation for advances under the 1933.•36 Housing Acts upon small houses to let has by no means been taken up. It is, however, noteworthy to record the substantial comparative contribu- tion made by the Halifax Society in the work of providing small modern houses. The Ministry of Health Reports show that to September 30th, 1937, 16,849 houses have been provided through the operations of these Acts. Of these, no fewer than 10,139, ot 6o per cent. of the total, were financed by the Halifax Building Society. Subsequent to September 30th, 1937, advances were made by the Society for the erection of a further 2,529 houses.

ADVANTAGE OF HOME OWNERSHIP.

There is another aspect of the Government's Housing proposals, however, which, in my opinion, calls for comment. The estimated ultimate annual charge on the Exchequer and Local Rates on a 40-years basis is £2,710,000 and £I,23o,oco respectively. Now, while this Society, and indeed all Building Societies, are wholeheartedly in favour of the main objects of the Bill, namely, the acceleration of slum clearance and rehousing, and the abatement of overcrowding, it is a matter, I think, of very grave concern that the Government should place upon the already heavily laden shoulders of the tax- payers and ratepayers of this country a further burden, particu- larly when the savings through Building Societies may be well employed on an economic basis in the provision of desirable housing schemes, and the great gift of individual ownership could be encour- aged and extended. There is no system of tenancy which is com- parable in its personal and social advantages to ownership, both for the individual and the nation. Every .homeowner is a bulwark in our social structure and a guarantee of national safety. Many problems remain to be faced in the future, and the political conditions of the European countries, and particularly the fear of war, have caused great anxiety and caution to our nation. Amongst these is the question of insurance of property against War risks, and the Building Societies' Association has been in constant touch with the Government to secure, if possible, an official assurance that the responsibility for war damage, should it come, would be borne by the National Exchequer as part of the inevitable cost and loss of any possible war. The report and accounts were adopted.