ASB announces record end-of-year profit

ASB has released its financial results for FY19, and has reported a net profit of $1,274 million for the year ended 30 June – an 8% increase on last year, and the ninth record profit in a row for ASB.

The increase was boosted by a one-off $46 million gain from its sale of Paymark Ltd, though profit excluding that gain is still significantly higher than last year’s $1.18 billion.

Cash net profit after tax was $1,191 million – a 4% increase on last year. ASB chief executive Vittoria Shortt said the result was the product of solid performance across the board, with all aspects of the bank’s business contributing to the growth – though noted that underlying profit was “more subdued” this year, reflecting the slow credit growth in the business and consumer finance spaces.

ASB also emphasised its commitment to good customer outcomes, and to helping borrowers eliminate their mortgage debt. The bank saw over 930,000 visits to adjust repayment options this year, with savings recorded in the tens of thousands of dollars.

“The current low interest rate environment provides an ideal opportunity for home owners to pay down debt and a big focus for ASB has been on providing customers with the tools to help them achieve this,” Shortt said.

“ASB Home Central helps our more than 230,000 home lending customers manage their home loan online and explore options to get mortgage free faster.

We have had a particular focus on working with our rural customers to help them make the most of the current low interest rate environment and historically high commodity prices. Encouragingly, we have seen many rural customers focus on paying down debt, and transitioning to more resilient and sustainable business settings.”

The bank saw customer deposits increase by 6% to $66 billion, and advances to customers also increased by 6% to $88 billion. It has also continued to invest in financial crime prevention and cybersecurity, and has increased its CET1 capital by $0.5 billion.

“Our long-term financial performance is driven partly by our continued focus on investing in and driving efficiency,” Shortt said. “Our cost efficiency advantage positions us strongly and allows us to be more resilient and remain profitable in the event of an economic downturn.”