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New Zealand

ASB annual profit up 6% in a year of two halves

New Zealand’s third largest bank, ASB, has reported increased profit for the year ending June 30, but says there was a noticable slowdown in the second half.

Wednesday, August 9th 2023, 3:32PM

ASB Bank’s net profit rose 6% to $1.56 billion in the 12 months ended June 30 from $1.47 billion a year earlier.

Total lending for the year increased 4%, with home lending up 3% and business lending up 5%. Cash net interest margin (NIM) increased by 22 bps.with net interest income up 17.2% at $3.05b. Net interest margins widened 22 basis points to 2.44%, which parent CBA said reflected higher deposit margins in the rising interest rate environment, offset by lower lending margins due to swap rates, mortgage competition and an unfavourable lending mix.

Residential mortgage lending grew 2.8% to $75.65 billion, lagging behind the wider credit growth, while corporate lending grew 6.1% to $30.32b.

ASB’s impairment charges rose to $64 million in the year from $41 million a year earlier as inflationary pressures, rising interest rates and declining house prices started to bite.

“We are seeing clear signs that growth is slowing which reflects the broader economic environment,” chief executive Vittoria Shortt said in a statement.

“However, our balance sheet remains strong and resilient which positions us well to continue to support our customers and the New Zealand economy.”

Like other lenders, ASB is working with its customers to help them through the rising interest rate environment, which is a first for many customers who’ve enjoyed prolonged periods of cheap finance.

“We’ve proactively contacted more than 12,000 customers to provide support as they refix their home loan,” Shortt said.

“While the majority seem to be well prepared and managing, we’ve deepened our support options for those feeling pressure.”

The bank set up a specialist team to help customers concerned about their position, completing more than 72,000 assessments.

Tags: ASB

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https://www.goodreturns.co.nz/article/976522085/asb-annual-profit-up-6-in-a-year-of-two-halves.html?utm_source=GR&utm_medium=rss&utm_campaign=ASB+annual+profit+up+6%25+in+a+year+of+two+halves ASB annual profit up 6% in a year of two halves

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