The Bank in 1939
At March 31st 1927, the Bank had a total amount standing to the credit of its Depositors of 7,800,221 - and Total Reserves amounting to 99,993 (ie a Ratio of Accumulated Profits to Depositor Liabilities of 1.28%). In the following twelve-year period, the Excess of Income over Expenditure ('Profit') was reported annually as follows:
March 31st
At the date of the 1927 Annual Report, the number of branches was 43. At the date of the 1939 Annual Report, the number of branches had increased to 62, thus incurring significant capital expenditure as the Bank continued its policy of purchasing the land and premises that it used for its new offices. The major expenditure in this period, however, was on the construction of a new Head Office. Only fourteen years after the Bank's commencement, a prestigious building was opened on Broad Street, in November 1933.
Of the 207,982 expended on Land & Buildings in this period, 104,032 was reported in 1933 and 1934; and of the total of 35,746, the sum of 13,456 was spent in 1934 on Furniture & Equipment - these amounts reflecting the costs of constructing and equipping the Head Office. With a very prudent policy regarding the depreciation of capital expenditure, these higher levels of outgoings had a significant impact on the Income & Expenditure Account.
Another factor affecting profitability was a fall in Interest Margin. In the period from 1928 to 1933, the difference between interest earned and paid increased from 101,207 to 156,687 - but in the following four years, varied between 124,760 (1936) and 145,966 (1934). The consequence of higher depreciation charges combined with lower interest margins had the most impact in the years 1935 to 1937 when the proportion of Interest Margin absorbed by Management Expenses exceeded 60%.
In this period, the amount of 207,998 that was charged for the depreciation of Land & Buildings, resulted in a written down value of only 86,653. Similarly, the depreciation for Furniture & Equipment of 44,758 resulted in a written down value of just 1,406 at March 31st 1939.
The Bank's volume of business continued to increase at an amazing rate. In the twelve years to March 31st 1939, Depositors' Balances increased by 21,550,015; Open Accounts increased by 240,403; and the number of annual transactions increased from 1,364,061 to 3,108,076.
This growth of business was achieved against the background of a period that included a severe industrial depression. Comments in the following Annual Reports reflected these achievements and trading conditions:
1928:The wonderful record of the Bank since its establishment is very gratifying to the Bank Committee and to the City Council. It must be no less pleasing to depositors and the public generally. Progress at the rate of 1,000,000 each year is a remarkable achievement, unequalled by any Trustee Savings Bank in Great Britain whose operations are confined to the area of a single municipality. To have enrolled 254,433 depositors in the short period of eight and a half years is an accomplishment of which the Bank Committee is justly proud. The Bank is unquestionably held in high esteem in Birmingham, and its pronounced success serves to emphasise the confidence of the citizens in this development of municipal activities. Long may the Bank enjoy such confidence.
1932: Our depositors stood firm during the financial crisis, and the Committee desire to take this opportunity of thanking them for the confidence shown during that trying time, and sincerely hope that our present depositors and other citizens who are not yet depositors will support the Bank, not only by saving themselves but by encouraging others to do likewise.
1933: The past year has been one of anxiety to many of our citizens, and the hope is expressed that the present year may be one of improved trading conditions, with a consequent reduction in the number of unemployed.
The Accounts of the bank, which are presented with this Report, are assuring. The unsettled conditions have, no doubt, caused many people to seek a safe place for their savings, and it is natural that they may turn to the Municipal Bank for such safety. Those who take part in public affairs or in social work must realise the beneficent influence wielded by this Bank, which renders public service and makes for public stability. The bank does not exist for the laying up of money for the mere sake of hoarding, but it is nevertheless an advantage to have some money in the Bank to fall back upon. The virtues of saving and thrift are not obsolete, and a good habit should not be lightly broken off.
1934: The year under review has witnessed a steady improvement in trade with the consequent drop in unemployment, thus relieving the anxieties of many who have courageously faced the preceding trying years. It is hoped that this improvement will continue, bringing increased prosperity and happiness in its train.
The position at March 31st 1939, therefore, was as follows:
Amount standing to the credit of Depositors:    29,350,236
Advances outstanding, secured by Mortgage of Freehold and Leasehold Estate:    2,431,517
Reserve Fund (Balance of Income over Expenditure):    407,135
Ratio of Reserve Fund to Depositors' Liability:    1.39%
Number of Open Accounts:    466,163 (approximately 37% of the population in Birmingham and adjoining areas)