First hotel licence, oldest surviving church and New Zealand’s first locally owned bank – Kororareka has had them all. The New Zealand Banking Co’s first bank opened its doors in Bank Square, Turners Terrace, (just south of where The Strand meets Pitt St today) in September 1840. The Board of Directors included Russell identities James Reddy Clendon and Gilbert Mair. Shareholders were confident of good returns as advertised interest rates were 10% for short term, and 12% for long term loans. Depositors were promised 4% on current accounts and 5% on fixed deposits.
Sadly, projected profits did not eventuate. Unforeseen events intervened: New Zealand’s first capital shifted from Okiato to Auckland, the bank’s head office followed in 1842 and then the Flagstaff War sealed its fate. 1843 saw the directors alarmed by the “frightful amount of overdue paper” ¹ which was equal to the whole paid up capital of the bank – £8278. As one commentator put it, when the residents headed for Auckland, “ That created a run on the bank and along with injudicious advances already made on land in Kororareka, found it short of cash but long in land.” ² The Company was wound up in 1845 and 5/- per share was distributed to the shareholders. The last receipt was made out in 1850.
Although this bank did issue bank notes in denominations of £1, £2 and £5, none are now known to exist. If one was found its value is estimated as close to $20,000.
Sources: 1. Lee, Jack. I have named it the Bay of Islands
Accession #: 11/150 Print
Brief Description: Auckland’s First Bank. Limited Edition Print No. 213 by JE Thomas of a series of 500. The New Zealand Banking Co.’s Bank was the first purely New Zealand Bank (ie New Zealand capital). It opened in September 1840. The Company was wound up in 1845. Text on the print reads: Opened in 1841, this charming little bank operated as a branch of the N.Z.Banking Company which had been established in the Bay of Islands in 1840. The building still stands in Bankside St off Shortland Street. Signed JE Thomas. 75. Mounted on matt board. W 39cm x H 28cm . Copy print Photofile no. 17002
From Port in the North
4 Sept NZ Banking Co. Head Office opened on Turner’s Terrace