Finance17-Bank 1920

The Bank's first period of trading was from September 1st 1919 to March 31st 1920. Having a financial year-end of March 31st brought the bank into line with the other departments within Birmingham City Council, but meant that the Bank's first 'year' consisted of only seven months. This article examines the position of the Bank after those initial seven months.

A considerable amount was achieved in those first seven months, but the Bank had the advantage of commencing its existence already running. By replacing its temporary predecessor, the Birmingham Corporation Savings Bank, the BMB had a head start when 22,592 accounts (of the 24,411 accounts in the temporary bank) were transferred. The Bank's General Manager, J P Hilton, described the preliminary work involved, in his book Britain's First Municipal Bank:

Having secured the transfers, the next thing to do was to carry them through. This was a big task; the clerical labour involved was enormous. It meant the closing of each account in the temporary bank just as if a withdrawal had been made; it meant the opening of each account in new ledgers. Then there were new pass books and index cards to make out, and particulars to enter in the specimen signature books. Day and night the staff worked in a magnificent manner; their enthusiasm was unbounded. It was team work which enabled the task to be done, and the youngest junior vied with the highest officer in doing his bit. It is team work still which contributes so largely to the successful working of the Bank year by year.

By March 31st 1920, those 22,592 open accounts had grown to 40,130 that were located at twenty branches as follows:

Head Office	17,381
Sparkbrook	4,870
Small Heath	2,392
Aston	2,144
Lozells	2,046
Ladywood	1,782
Handsworth	1,509
Saltley	1,041
Duddeston	1,015
Hay Mills	970
Balsall Heath	909
Rotton Park	749
Selly Oak	735
Harborne	466
Erdington	458
Acocks Green	423
Kings Heath	370
Stirchley	311
Bearwood	307
Northfield	252

	40,130

Many of these branches were located in temporary offices, ranging from private houses to a room in a library or a school, as described in entries for the individual branches. Transactions on these accounts numbered 163,787.

At the end of this first financial period, the Bank published its Statement of Accounts in two parts: a Receipts & Payments Account and a Balance Sheet. This format was used up until March 31st 1926; subsequent Statements of Accounts produced an Income & Expenditure Account as well as a Balance Sheet.

Data extracted from the accounts show that the Bank made a loss of £1,702 in its first trading period:

Income:	£
Interest Receivable	14,495
Rents Receivable	53
Sale of Rules	36
Contributions by Bank Staff to Superannuation Scheme	71
Total Income:	14,655
Expenditure:
Interest allowed to Depositors	9,378
Salaries and Wages (including National Health Insurance)	3,653
Printing, Stationery and Advertising	746
Heating, Lighting and Cleaning	230
Rents, Rates, Taxes and Insurance	732
House Purchase Department: Valuation Fees on Properties	259
Repairs, Decorations and Adaption of Premises for Bank Purposes	524
Postages, Branch Bank, Travelling and Miscellaneous Expenses	835
Total Expenditure:	16,357

Excess of Expenditure over Income:	1,702

The Balance Sheet showed the following position:

Liabilities:	£
Amount standing to credit of Depositors (including interest)	746,984
Creditors for Stationery, Repairs, Equipment, etc	1,748

Total Liabilities:	748,732

Assets:
Cash in hand at Head Office and Branches	5,732
Cash with Corporation at Short Call	698,512
House Purchase Dept: Amount repayable by Depositors	39,111
Debtors for Rent	14
Stock of Unused Stationery, Pass Book, etc	796
Furniture and Equipment at Head Office and Branches	1,563
Structural Alterations of Bank premises	374
Parliamentary Bill Expenses of Establishment of the Bank	928
Balance of Income and Expenditure Account	1,702

Total Assets:	748,732

The deficit on the Income & Expenditure Account was wiped out in the following year when a Profit of £6,539 was made. The Bank then continued to make profits in succeeding years. By March 31st 1923, the deficit of £7,149 held on the City's Borough Fund and Rate Account regarding the accumulated losses of the Birmingham Corporation Savings Bank, was paid off - largely assisted by a Profit made on Sale of Investments that year of £34,156.

The amount due to Depositors at March 31st 1920 was the result of:	£
Amount deposited (including transfers from temporary bank)	873,705
Interest added to accounts	9,378
Amount withdrawn	(136,099)
Balance due to Depositors	746,984

In the House Purchase Department, 148 advances were made:
Amount advanced	39,873
Repayments made	(762)
Balance outstanding	39,111