COMPANY MEETING
CHARTERED BANK OF INDIA, AUSTRALIA AND CHINA
MR. VINCENT A. GRANTHAM ON THE POSITION
Tan eighty-eighth ordinary general meeting of the Chartered Bank of India, Australia and China was held on April 1st in London. The following is the statement by the chairman, Mr. Vincent 'A. Grantham, circulated with the report and accounts:
When we last met, we did so under the shadow of the threat of extended hostilities in the Far East. Since then, the entry of Japan into the war has resulted in the falling into enemy hands of our branches in China, Japan, the Philippines, French Indo-China, Siam, Malaya, Sarawak, and Java. Our branch at Rangoon has been evacuated to Mandalay and we still have our business in India and Ceylon, which represents an important part of the bank's total undertaking, together with our interest in the Allahabad Bank Limited.
BALANCE-SHEET FIGURES The balance-sheet again shows considerable expansion, the total at £90,925,552 being an increase of £14,811,324 over last year's total of £76,114,228, the previous highest in the bank's history. The increase is largely confined to current and other accounts, which, with an increase of £14,465,559, stand at £67,844,490. Fixecideposits, on the other hand, show a further decrease of £4980,251 at £10,146,113, and these two diverse movements again reveal the desire for liquidity on the part of our clients, which is so prominent a feature today. The only other changes of note in our liabilities are an increase in acceptances on account of customers of £1,394,877, reflect- ing a greater demand for this form of finance by our clients, and an increase of some £972,5oo in loans payable against security, taken at various branches to finance current requirements.
ASSETS
Turning now to the assets side of the balance-sheet, and bearing in mind my previous remarks, I think you will agree that it shows the bank to be in an extremely strong and liquid position. Cash in hand at £14,787,422 is £3,208,905 higher than a year ago, and comprises 21.8 per cent, of our liabilities on current accounts, or 20.7 per cent, of all our sight liabilities. We again show a large increase, amounting to £9,714,158, in our Government and other securities, the actual total being £37,435,924. This increase is mainly the result of purchases of British Government securities, chiefly tap issues of a short-dated character. Bills of exchange, including Treasury Bills show a decrease of £2,233,636, but as the balance of head office and inter-branch remittances, drafts, &c., in transit, also showing a decrease on last year's figure, should be added for purposes of comparison, it is probable that the real decrease exceeds the amount stated. Bills discounted and loans at £23,733,338 show a welcome increase from the profit-earning point of view of £3,092,402, and I am pleased to say that this increase has not occurred at points in the occupation of the enemy at December 31st. 1941.
PROFIT AND Loss ACCOUNT I now come to the profit and loss account. Up to the time of the entry of Japan into the war we had a good year ; since then we have lost the earning power of those branches, but the result of the full year's working still shows a profit of £352,865 6s. tod., after pro- viding for all ascertainable losses and for taxation.
Adding the balance brought forward from last year of £182,602 9s. tid., a total of £535,467 16s. 9d. is available, out of which an interim dividend at the rate of to per cent. per annum, costing £150,000, was paid last October.
In view of all I have said above and the many uncertainties which have yet to be faced, the shareholders will not be surprised that the directors propose that the final dividend be reduced to 5 per cent, per annum for the half-year to December 31st last, costing £75,000. They recommend that £50,000 be transferred to the Officers' Pension Fund, leaving £260,467 16s. 9d. to be carried forward..
FUTURE PROSPECTS While you will naturally wish me to deal with the effect of the war upon the profits of this and future years, I am confident you will not expect me to make any sort of forecast. We still have a large and thriving business in India which will, we hope, continue to yield good results, although, of course, it may be affected by the course of hostilities in the East, but it is obvious that the temporary kw of so many of our branches in the Far East, the expenses of which must largely continue while the earning power is absent, must bring about a heavy fall in profits. No general improvement can be hoped for until a successful termination of hostilities has been achieved, but I want to reuirlivie by saying how encouraging it is that at a time when serious difficulties have to be faced the financial position of the bank should be on such a sound and liquid basis.
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