Tíminn - 13.07.1972, Page 13
Kimmtudagur. Ki. júli. 11)72
TÍMINN
13
HAMBROS LIMITED
A statement of the year’s progiess.
Mr.Joceíyn HambroMQ reports to shareholders.
A major event occurred during the year when
we found ourselves legislated out of the U.S.A. by the
One Bank Holding Company Act. Having, only three
years previously, been brave enough to “hang out our
shingle” on Wall Street and done satisfactorily well in
the meantime, it was with much regret that we decided
that the penalties imposed by the Act on our non-
U.S.A. activities were too great a burden and that we
should, therefore, give up accepting deposits in New
York. We spent many hundreds of man hours explor-
ing the various avenues open to us, but in the end,
withdrawal emerged as clearly the right course for us
and we proceeded to sell our business to First Empire
State Corporation, Buffalo. We look forward to our
association with the new owners and we welcome their
President, Mr. Charles Diebold, to the Board of
Hambros Bank Limited.
On 3ist March this year, I retired as Chairman
of the Bank in favour of my cousin, Charles Hambro.
Seven years ago when, owing to the sudden death of
Jack Hambro, I became Chairman, we set out with a
young team. Today, we are all seven years older and it
seemed essential to me to let in some blue sky for the
up and coming generation. I intend to continue as
Quirman of Hambros Limited and, in a non-executive
capacity, of its direct United Kingdom subsidiaries
other than the Bank. I extend to my cousin and his
team the very best of good wishes for the years to
come. I hope that my advice will be of value to them,
but I wish to stress that it will be advice only.
We welcome to the parent Board Mr. Ian
Morrow who has been associated with us for many
years as leader of our team of industrial advisers. He
will serve as a part-time director, bringing wide
experience and great ability to our afiairs.
Group Eamings and Accounts
At the half-year stage last September we felt
ohliged to tell Shareholders that we believed it unlikely
that results for the full year would show much change
frorn those of the previous year and we referred speci-
fically to certain larger than normal debt provisions
with which we were faced. In reporting a Group profit
after tax of £4,094,000 we are happy that our worst
fears were, in the event, not realised, that this profit is
in fact over 36 per cent higher than last year’s and that
we have been able to deal with the problems to which
we referred entirely out of current eamings.
In the Notes that form part of the accounts we
have set out in some detail the accounting policies of
the Group. In common with other Accepting Houses
we continue to state our banking profits after tax and
after a transfer to inner reserves. Also we observe the
conventions for banking companies in our balance
sheeL In some respects these bear more heavily on our
reported eamings than would, for instance, the
method of dealing with debt losses adopted by the
Qearing Banks. We support the moves towards full
disclosure of banking earnings, but, equally, we believe
.that Shareholders should be fully informed of the
eflect of the existing conventions.
The accounts of Hambro Life Assurance are
consolidated with those of other companies of the
Group but the consolidated net profit contains no
contribution from Hambro Life. The consolidated
balance sheet has again increased in total and reflects
an unusually liquid position at the year end. This is
largely due to our operations within the eurocurrency
interbank market. The current year has also shown a
marked increase in internally generated reserves. This
axose partly from our consolidation of Merchandise
and Investment Trust’s reserves when that company
became a subsidíary, partly from a re-valuation of our
holding in Berkeley Hambro Property Company and
partly from normal investment operations. We have
taken the opportunity of eliminating from the con-
solidated balance sheet the item of Goodwill which
absorbed £6,272,000. Nevertheless we are still left
with an increase in capital and published reserves of
£8,695,000 of which all but £2,538,000 was intemally
generated.
Hambro Life
The confidence I expressed last year in our new
venture in the life assurance field, led by Mr. Mark
Weinberg, was more than justified by the exceptional
growth of Hambro Life in its first year of operation in
unit-linked assurance. During the year, over 30,000
new policies were issued and, by 3ist March, 1972,
the investment funds of the Company had grown to
nearly £50 million. Hambro Life has established 26
branches and now enjoys the support of leading insur-
ance brokers, as well as its own sales associates,
throughout the country. Measured by new sales, it
reckons it is already in the top half-dozen life assur-
ance companies in the United Kingdom and at ist
June its total assets were about £60,000,000.
An expanding life assurance company is usuaQy
expected to run at a deficit for anything up to its first
ten years. It is therefore particularly significant to note
that, for its accounting period ended 3ist December,
1971, Hambro Life succeeded in achieving a small
surplus. This reflects the tight control exercised on
expenses as well as the marketing success and an in-
creasing surplus is expected in the future. For the
present, such surpluses will be retained in the Life
Assurance Fund to strengthen the resources of the
company.
Berkeley Hambro
Property interests during the last few years have
become an increasingly important part of our opera-
tions. We had acquired substantial sites and buildings
adjoining our Head Office in Bishopsgate, which we
already owned, with a view to major re-development
of the whole area. In addition, we had built up a
department providing specialist property management
HAMBROS LIMITED
Consolidated Financial Statement
as at 3ist March, 1972 1971
£ £
Paid-up capital and reserves 43,583,465 34,887,932
Loancapital Minority shareholdcrs’ intcrcst 17,058,199 18,244,261
in subsidiaries Assurancc fund of Hambro Lifc 6,719,552 10,198,316
Assurance Ltd. .. .. Current deposit and othcr 25,619,806 —
accounts .. .. •• 727,821,264 638,631,228
Proposed final dividends 1,428,137 1,111,734
Acceptances for customera .. 81,914,829 72,754,954
Balance with bankers and money £904,145,252 £775,828,425
at call Bank certificates of deposit and 46,373,363 58,499,864
bills discounted Term’ loans to banks and local 16,217,504 9,676,584
authorities .. 319,313,290 204,697,522
Government and other sccurities 18,621,848 46,907,625
Bullion and trading stocks 48,987,164 50,257,134
Advances and othcr accounts .. 303,923,986 299,587,747
Customers’ liabilities for
acceptanccs 81,914,829 72,754,954
InvestmenU .. .. .. 68,793,268 33,446,995
£904,145,2S2 £775,828,425
Dividends paid nnd proposed .. 1,839,083 1.502,316
Rclaincd profits 2,255,759 1,503,704
^PROFIT FOR THE YEAR .. £4,094,842 £3,006,020
HAMBROS LIMITED
41 Bishopsgate, London EC2P2AA
for investment and development on behalf 0f prhrate
clients and institutional customers.
Last year we decided that these activities could
best be continued and expanded if they were merged
into a quoted property company and we negotiated the
sale of all our property interests to the Berkeley
Property and Investment Co. We already held about
12 per cent of Berkeley and, as a result of the merger,
this is now increased to 44 per cent of the enlarged
company which has been renamed Berkeley Hambro
Property Co. The Board of Berkeley Hambro is
headed by Mr. H. N. Sporborg, and the management
has been reinforced by our former property team
headed by Mr. John Spink, who is now deputy chair-
man and a joint managing director of Berkeky
Hambro.
All the Group’s property interests, whidi also
include Property Fund management for Hambro Life,
are now entrusted to Berkeley Hambro. These com-
plement the already substantial operations that
Berkeley had in North America, the Channel íslands
and, of course, in the United Kingdom. We have great
confidence in the future of this operation.
European Economic Community and tfae
Future
The Gty of London finds itself faced with a
great challenge in the next decade. If the opportunities
in Europe are seized, the scope is tremendous and the
Merchant Banks should be in the forefront of this
effort. Our ease of dealing on the London Stock Ex-
change, for instance, with some help from the Govem-
ment in respect of Bearer and No Par Value Shares,
stamp duty and a simple method of Registration could
make London the centre of dealing in all European
securities. The London Markets in Money, Foreign
Exchange and Commodities are also more highly
developed than their counterparts in Europe.
In these comments I have said nothing of the
mainstream of banking activities which are the pre-
dominant contributors to the results you see and
occupy by far the greater part of our attention. That
these may be taken so much for granted is a tribute to
the established and continuing confidence that cxists
between banker and customer in all those areas, ship-
ping, forestry, leasing, íunds management, corporate
finance, etc., on which we have tried to concentrate.
There has been a satisfáctory increase in our business
in all these areas, and we have also made further pro-
gress in developing new business in other countries
where we have become more deeply involved in recent
years. Our acceptance credits in particular show a
satisfactory increase from £73 m. to £82 m., and we
have great faith in the continued expansion of this
instrument of finance, in international trade. The
business of an international merchant bank is many
sided. Our interests, our oflices and our staff stretch
across the world.
During the year we have disposed of our Regis-
tration Department and we wish to extend our thanks
particularly to all those involved in the transfer to
National Westminster Bank. To all our employees I
would like to express my personai thanks for the
support they have given me as Chairman over the last
seven years, for their hard work and for their contri-
bution to the growth and development of our business.