COMPANY MEETING

ROYAL BANK OF SCOTLAND

THE CHAIRMAN'S REPORT

THE annual general court of proprietors of The Royal Bank of Scot- land was held at Edinburgh on Wednesday, November 26th, 1941. His Grace the Duke of Buccleuch and Queensberry, G.C.V.O., governor of the bank, presiding, said:

Before dealing with the ordinary business of the meeting I should refer to the great loss which the bank has suffered through the death, on August 27th, 194t, of Mr. R. N. Dundas, W.S., who had been a director of the bank since 1929. By his death we have lost a director whose wide experience of affairs was of great value to us and whose kindly qualities endeared him to all his colleagues.

The twelve months covered by our accounts mark the second com- plete year of the war. The anxieties of the previous year have con- tinued throughout, but although the outlook is still obscure we can, without minimising the heavy task in front of us, look with growing confidence to the future.

Turning to the balance-sheet, we show, for a Scottish bank, an impressive total of assets amounting to £98,263,226.

Under the heading "liabilities," deposits and other credit balances have increased by £6,915,856 to the figure of £82,o07,146 appearing in the balance-sheet.

Notes in circulation at £4,602,641 show an increase over the previous year of fully £800,000.

The total of £2,077,186 for acceptances and endorsements of foreign bills and other obligations shows little change from the figure of last year.

On the assets side our holdings of cash, balances with the Bank of England and other banks, money in London at call and short notice, which reach the large sum of over £18,000,000, provide ample evidence of a highly liquid position and, along with Treasury deposit receipts, which stand in the balance-sheet at £6,5oo,000, represent fully 28 per cent, of our liability for deposits and notes issued. I may add in passing that the amount of Treasury deposit receipts has increased since the date of our balance to £to,000,000.

British Government securities at £34,765,619 are up by almost £6,000,000 on the year.

It will be seen that the whole of the increase in our deposits, in addition to the sums arising through a reduction in our advances, has gone to aid the Government loan programme for financing the war.

I can again say that a high proportion of our investments in Government stocks is in short- and medium-dated loans, and that all these and our other investments are valued at or under market prices. ruling on the date of our balance.

The total of our advances has declined to £23,926,630 from £25,910,494 a year ago, when we then recorded a fall of £2,000,000, in what is regarded as the most remunerative part of a bank's business.

The net profit of the year at £491,522 6s. 7d. is £65,836 13s. 8d. less than the amount declared a year ago.

I am sure that the stockholders will not be surprised at the lower profits shown in view of the higher taxation and the continued increase in the charges of management.

The directors are pleased to be in a position to recommend that a dividend for the half-year on the capital stock at the rate of 17 per cent, per annum be declared, and that £30,000 be applied in writing off expenditure on bank buildings and heritable property, and that £3o,000 be carried to staff pension reserve fund. After these appro- priations there remains the sum of £70,272 6s. 7d., which it is pro- posed to carry to our inner reserves against contingencies.

The report and accounts were approved.