ASB today released its annual results for the financial year ended 30 June 2016, reporting a statutory net profit after taxation (NPAT) of $913 million, representing a 6% increase on the prior financial year.
The bank’s cash NPAT was $908 million, up 5% on the prior financial year; advances to customers were up 10% to $72.1 billion; loan impairment expense was up 46% at $130 million; and cash net interest margin decreased by 6bps to 2.32% reflecting a highly competitive environment and the continued preference of lower-margin fixed rate mortgages.
ASB chief executive Barbara Chapman said the figures are a result of sustained growth in key market segments and a focus on providing exceptional experiences for customers.
“We have achieved this result against the backdrop of a highly competitive market and some significant headwinds in the form of global market volatility and fluctuating commodity prices,” said Chapman.
“Despite this, we have remained focused on executing our strategy and pursuing initiatives to drive profitable growth across our business.”
The 10% rise in customer advances show a strong lending growth across all key portfolios including business, commercial, rural, personal and home lending, while deposits were up by 5%.
“A key pillar of our strategy is around leveraging technology to improve the way we serve our customers through offering simple, seamless and secure mobile and digital experiences,” said Chapman.
“More than three quarters of our personal customers are active on our digital channels and are accessing an increasing range of banking services through their mobile devices. As a result, we have seen sales made through our digital channels more than double over the past two years.
“A focus on innovation and technology also drives efficiency and we continue to transform our business, streamline how we work and digitise processes. Even with continued significant investments in technology and specialist frontline capability, disciplined cost management and efficiency improvement saw a 110 basis points reduction in our cost to income ratio to 37.3%.
“At ASB we maintain a strong belief in the importance of making a positive impact on the communities in which we operate. Over the course of the financial year, we contributed more than $12 million in donations, community investments, and sponsorships. Key successes have included our ongoing partnership with the All Blacks and the completion of the first combined ASB Classic Tennis tournament featuring both women’s and men’s fields. In addition, our ASB GetWise financial literacy programme for schools passed another milestone recently with 600,000 children having been registered to receive an ASB GetWise session.”
ASB was named New Zealand’s Bank of the Year for the third year running, in December 2015 and the eleventh time in fourteen years, by London-based magazine The Banker.