ASB reports $10m loss

ASB Bank has reported a $10 million loss for the six months to December after agreeing to pay $264m in tax and interest involving disputed foreign lending deals.

Excluding the one-off tax hit the bank made a profit of $199m after tax, down 16.4 per cent on the same time the previous year.

ASB was among the main banks involved in a collective $2.2 billion settlement with the Inland Revenue over disputed structured finance transactions, which the High Court ruled to be tax avoidance last year.

ASB said $209m of its settlement figure was accounted in the half.

Impaired loans have nearly doubled to $127m compared to December last year and total provisioning for bad and doubtful debt more than doubled to $340m from $157m, accounting for about 0.53 per cent of total assets.

The higher cost of funding and higher interest rates paid on retail deposits caused ASB's net interest margin to decrease by 1 basis point 1.64 per cent in December from previous six month period.

A significant fall in demand for borrowing led to total assets reducing slightly to $64.6b.

Total lending grew by 3 per cent to $54.1b.

Home loan balances increased by 3.2 per cent during the year to December to $38.3b, with market share remaining steady at 23.3 per cent, while Rural, Commercial and Corporate lending was up 2.5 per cent to $13.5b.

Total deposits increased slightly to $57.6b from a year earlier.

Retail deposits were up 2.9 per cent to $31b, with market share remaining steady at 21.4 per cent.

- © Fairfax NZ News