An improving economy and favourable funding conditions helped
ASB Bank boost its annual statutory net profit by 14 per cent
to a record $806 million.
Cash net profit rose 11 per cent on the prior year to $776
million, the Auckland-based bank, a division of Commonwealth
Bank of Australia, said in a statement.
ASB said cash net profit was its preferred measure of
financial performance because it presented the bank's
underlying operating results and excluded items that
introduced volatility or one-off distortions.
Chief executive Barbara Chapman said the bank had achieved a
strong result amid an improving economy and favourable
"Over the course of the financial year, all areas of the
business have performed well with solid lending growth across
all key portfolios of 5 per cent, despite heightened price
assertiveness in the home loan market," Chapman said. "The
improving New Zealand economy has undoubtedly played a role
with rising confidence and solid lending growth, particularly
among business and rural customers. Both deposit and lending
volumes have been positive compared to the prior year. This
broad momentum has resulted in business and rural lending
rising by 8 per cent against the previous financial year,
significantly ahead of market."
ASB said changes to its mix of assets, as well as positive
funding conditions, helped boost its net interest margin 0.13
per cent to 2.38 per cent.
Loan impairment expenses were unchanged from the previous
year at $56 million due to improving economic conditions and
a strong housing market, particularly in Auckland and
Christchurch, the bank said.
ASB reported full-year interest income of $3.6 billion, up
from $3.5 billion a year earlier.
Advances to customers rose 5 per cent to $60.7 billion, while
customer deposits lifted 7.3 per cent to $44.3 billion, the
ASB said operating expenses rose 4 per cent to $767 million
as a result of increasing costs including those associated
with the bank's move to a new Auckland headquarters at North
Wharf and ongoing investment in IT infrastructure.
"Expense growth was partly offset by ASB's strategic focus on
driving productivity gains across the business, particularly
around streamlining processes to make it as effortless as
possible for our customers to bank with us," Chapman said.
- By Christopher Adams of the New Zealand Herald