Net earnings of the Bank for the year, after provision for taxes and depreciation, were $17,642,160.32 including $6978,24.77 of profits from the sale of bonds which were transferred to reserves. This compares with earnings for 1938 of $10,547,75049, including $2,856,889.72 of profits irom the sale of bonds which were transferred to reserves. Thus exclusive of profits on bond sales the year's net earnings were $10,663,644.55 as compared with—$7,690,860.77 for 1896. Net earnings for the year do not include recoveries, of which $3,000,000 were taken into Undivided Profits for transfer to Surplus and the balance carried into reserves.
From the year's earnings, dividends of $6,200,000 were paid or set aside for payment and $4,463,644.55 was carried to Undivided Profits.
Surplus was increased $6,000,000 during the year by transfer from Undivided Profits and at the year-end stood at $52,500,000.
After these transfers Undivided Profits at the year-end stood at $15,- 016,584.23 and were larger than a year ago by $1,463,644.55.
We are continuing a conservative policy in the valuing of our assets, and I feel that if favourable conditions prevail further recoveries may be expected. We continue to maintain unallocated reserves which we believe to be adequate. In accordance with our customary practice they have been deducted in arriving at the figures at which our assets are carried on our published statement.
The improvement in net earnings other than profit from bond sales was due to a number of factors. The funds invested in securities have been larger and we have added to our serial loans which carry a higher rate of interest than short term loans. The return from foreign operations has been greater.
Text read from the printed page and cleaned; old type leaves the occasional error.