ASB reports record half

ASB has reported an after-tax profit of $474 million for the six months ended December 31, up 7% increase on the same period a year earlier.

Advances to customers were up 10% to $68.7 billion and the bank reported funds management income growth of 17%.

ASB's loan impairment expense was $41 million, up 11%.

ASB chief executive Barbara Chapman said the result reflected strong balance sheet growth, market share gains in targeted growth areas and sustained momentum in funds management. “Our strategy has seen us continue to invest in building frontline capability in specialist areas such as our commercial and rural teams. At the same time, we have remained focused on maintaining our leadership position in technology and innovation. This has allowed us to deliver a solid first half performance in a highly competitive market.”

Growth in customer advances reflected increasing business, commercial, rural and personal lending and home loan growth improving to be in line with market. ASB’s focus on customer deposits has resulted in strong deposit growth of 9%.

“The largest single contribution to the change in net interest margin is the trend of customers taking advantage of the current low interest rate environment,”  Chapman said. “Against the background of a highly competitive market for both lending and deposit products, we have also seen a continued customer preference for lower margin fixed-rate mortgages."