EASTERN BANKING PROGRESS
It requires very little reflection to see why 1938 was bouni to be a difficult year for banks operating in the Ea'i. Commodity prices were moving irregularly downwards, volume of trading tended to dwindle, money rates remain,: 1
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FINANCE AND INVESTMENT
(Continued from page 568) abnormally low, and in China and Japan business was made immensely difficult by political and military developments. In all the circumstances the Eastern banks have done remark- ably well. The Mercantile Bank of India, for example, actually achieved a slight increase in profit and maintained its dividend at 12 per cent. A fall in profits from £415,862 to £394,063 in the case of the National Bank of India is obviously very moderate, and shareholders will not complain at the reduction in the dividend from 18 to 16 per cent. Inevitably the really sharp fall in earnings has been incurred by the Chartered Bank of India, Australia and China, with its extensive business in China and Japan. Net profits fell last year from £456,065 to £300,309 and the dividend, which had been steadily held at 14 per cent. over a long period of years, is reduced to to per cent. Here are the returns now offering on the shares of these three banks after the 1938 results.
Current Price. Yield 7,,
The range of yields is rather wide, but is narrowed con- siderably if one ignores the low return on the Mercantile Bank " C " shares, which have the attraction of being fully- paid. I would not like to argue that in current market conditions quotations will not go a little lower yet, but as long-term investments all these shares have undoubted merit. Management is alert, the balance-sheet position is strong, and one may be sure that if world trade does improve, all these
banks will continue to earn satisfactory profits.
* * * *
Chartered Bank of India, Australia and China £5 shares National Bank of India £25 shares (£i2i paid) ...
Mercantile Bank of India £5 fully paid do. "A" and " B " £25 shares (£i2i
£8i2d £301 £x2gxd
£2,6isd
£ 5 6 4 5 s. d.
12 8 12 3 17 0 14 4
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