Record interim profit for ASB
ASB Bank has posted its biggest half-year profit, making $416 million after tax on the back of solid lending growth, higher margins and falling bad debts.
The Australian-owned bank's profit for the six months to December 31 rose 14 per cent from the same period in 2012.
On a cash-profit basis, which adjusts for distortions and accounting "noise", ASB made $393m, up 12 per cent.
The strong result was driven by a 7 per cent increase in lending from December 2012, with total operating income boosted 10 per cent to $984m.
That was partly offset by expenses climbing 8 per cent, which the bank attributed to its move to the new Wynyard Quarter headquarters in Auckland, as well as ongoing investment in technology.
ASB also benefited from impairment losses on its loans falling another 25 per cent to $21m.
Chief executive Barbara Chapman said improving economic conditions, the low interest-rate environment and a robust housing market had all helped reduce bad debts.
The lender's net interest margin, the difference between the cost of its borrowing and the interest rates the bank lends at, rose from 2.22 per cent to 2.35 per cent.
Customer deposits increased 10 per cent over the period as New Zealanders focused on saving and investment.
Chapman said the momentum over the first half of the financial year was a product of better market conditions, as well as improving productivity and focusing on customers.
In Australia, ASB's parent company CBA has also delivered a record-breaking half-year cash profit of A$4.27b (NZ$4.6b).
Shareholders in the banking giant have been rewarded with a higher interim dividend of A$1.83.