MIDLAND BANK DEPOSITS
Like other members of the " Big Five," the Midland, which is still the largest, has suffered a modest setback in earnings. Net profit is shown at £2,445,671, against £2,508,009, but is again sufficient to cover the 16 percent. dividend rate and further substantial allocations to reserves. In the balance-sheet there are several very interesting move- ments, of which the most striking is the fall of L33,547,000, or 6.7 per cent., in deposits. On the average during the year deposits ran at a rather higher lever than in 1937, but these figures bear witness that during the second half of 1938 the efflux of foreign funds caused a sharp downward trend. Thus, the Midland Bank's total is not merely down from the 1937 peak, but back to the lowest level since. 1935.
On the opposite side of the balance-sheet the contraction in deposits is matched by a, sharp reduction in the bank's portfolio of bills, which is £34,660p00 lower at £48,499,000. Investments, at £118,869,000, have been held at a high figure, and it is satisfactory that advances, in face of trade recession, have reached a new record level at £209,255,000. The ratio of advances to deposits has thus increased rather sharply from under 42 to 45 per cent. Taking advances and investments together, the ratio is up from 65 to nearly 71 per cent., which probably represents an upper limit. It seems fairly clear that this bank, at least, and, I suspect, most of the others, will not be anxious to increase its invest- ments very much this year.
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