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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 funding conditions.
"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 bank said.
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