Despite market challenges, this major bank has reported a significant increase in net profit
ASB Bank has reported a 17% increase in statutory net profit after taxation at $1.07 billion for the twelve months ended June. Over the same period, its cash NPAT registered a 13% increase sitting at $1 billion.
ASB chief executive Barbara Chapman said the bank’s strong annual result was the product of sustained lending and deposit growth across the business, generated against the backdrop of an uncertain global economy, volatile offshore funding costs and pressure on margins.
Its home loans increased by 7% from a year ago, while business, commercial and rural lending grew by 11%. This contributed to an increase in total customer lending of 8%, while customer deposits were up by 6%.
“Over the past year, we have remained focused on delivering sustainable, diversified balance sheet growth across our key customer portfolios. All our business units performed well and we continue to experience sustained momentum, despite some external headwinds and a rapidly evolving financial services market,” she said.
ASB’s cash net interest margin decreased by 15bps to 2.18%. Chapman said the reduction was driven by a combination of increased funding costs and higher net costs relating to customers breaking fixed rate loans.
With an income growth of 14%, ASB sustained a momentum in funds management.
Its operating income growth was 5% (on a cash basis). This, combined with a prolonged period of near flat expense growth, contributed to a cost to income ratio of 35.8%, an improvement of 140bps over the prior year.
“With this in mind, we have continued our strong investment in technology and innovation and have introduced a range of practical new enhancements to our digital offerings,” Chapman said. “Just one example is our digital home loan re-fix functionality, which means customers no longer require staff assistance to re-fix their home loan rate. Instead, they can access personalised pricing and complete their re-fix when and where it suits them.”
ASB chief executive Barbara Chapman said the bank’s strong annual result was the product of sustained lending and deposit growth across the business, generated against the backdrop of an uncertain global economy, volatile offshore funding costs and pressure on margins.
Its home loans increased by 7% from a year ago, while business, commercial and rural lending grew by 11%. This contributed to an increase in total customer lending of 8%, while customer deposits were up by 6%.
“Over the past year, we have remained focused on delivering sustainable, diversified balance sheet growth across our key customer portfolios. All our business units performed well and we continue to experience sustained momentum, despite some external headwinds and a rapidly evolving financial services market,” she said.
ASB’s cash net interest margin decreased by 15bps to 2.18%. Chapman said the reduction was driven by a combination of increased funding costs and higher net costs relating to customers breaking fixed rate loans.
With an income growth of 14%, ASB sustained a momentum in funds management.
Its operating income growth was 5% (on a cash basis). This, combined with a prolonged period of near flat expense growth, contributed to a cost to income ratio of 35.8%, an improvement of 140bps over the prior year.
“With this in mind, we have continued our strong investment in technology and innovation and have introduced a range of practical new enhancements to our digital offerings,” Chapman said. “Just one example is our digital home loan re-fix functionality, which means customers no longer require staff assistance to re-fix their home loan rate. Instead, they can access personalised pricing and complete their re-fix when and where it suits them.”
