COMPANY MEETING
THE HONGKONG AND SHANGHAI BANKING CORPORATION
RECORD PROFIT
Tim Ordinary Yearly General Meeting of The Hongkong and Shanghai Banking Corporation was held on 18th March, 1966, at the Hongkong Hilton Hotel, Victoria, Hong Kong. Mr. J. A. H. Saunders, D.S.O., M.C., the Chairman and Chief Manager presided.
The following is an extract from the Chairman's address: The profit for the year after providing for taxation amounted to the record figure of $60,496,691 (£3,871,000), an increase of 8.5% over the previous year. It is proposed that $5,000,000 (£312,000) should be written off Bank Premises. After allowing for this provision and the interim dividend of 3/6d per share, your Directors recommend a final divi- dend of 6/6d per share which, on the shares out- standing at 31st December, 1965 amounts to just over $33,000,000 (£2,055,000) leaving a balance of over $11,000,000 (£693,000) to be carried forward.
There have been increases in all sections of the Group Consolidated Balance Sheet, part of which are due to the inclusion of Hang Seng Bank Limited Accounts, and particularly noteworthy is the in- crease in Current, Deposit and other Accounts of $1,464,000,000 (191,500,000). Bank Premises Account reflects the addition of Hang Seng Bank properties and the cost of our new seventeen storey building in San Francisco.
You will no doubt recall the difficulties which befell a number of Chinese banks a year ago and the resultant uncertainty and unfounded rumours which affected the Hang Seng Bank. This led to our accepting the offer of the shareholders of that bank to acquire a 51% interest therein. I am glad to say
that there has been a remarkable improvement in their position compared with that of a year ago and I am confident that this trend will continue. As forecast last September, profits earned by Hang Seng Bank were only slightly less than those for the previous year and they have maintained the same rate of dividend of $6 per share.
As has been already announced, H.M. Treasury and the Bank of England have given their approval to the transfer of the Head Office and control of Mercantile Bank Limited to Hong Kong. The new Head Office will start functioning in our Head Office building on 31st March when it is intended that your Board of Directors will become Directors of Mercantile Bank Limited. The London office of Mercantile Bank will continue to be at No. 15, Gracechurch Street, next door to our own London office.
Your Californian subsidiary has been operating since last November in their imposing new build- ing in San Francisco. This bank's capital and surplus was doubled last year to US$10,000,000 and it con- tinues to make good progress.
In Australia the growth of Mercantile Credits Limited, in which we have a 40% interest, has con- tinued throughout the year. We have increased the paid up capital of Wardley Australia (Pty.) Limited to A£1,000,000, or, I should now say, A$2,000,000 while Hongkong Finance Limited, whose paid up capital has also been increased to A$2,000,000, has become a public company to enable it to accept deposits from the public and is becoming increas- ingly well known in financial circles.
The Report was adopted and a one-for-ten scrip issue sanctioned.
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