ASB facing tough conditions

ASB performed well in the first quarter but operating conditions remain difficult in New Zealand, parent Commonwealth Bank of Australia (CBA) said today.

CBA today reported cash earnings for the September quarter of $A1.4 billion ($NZ1.78 billion).

There were no separate figures for New Zealand.

CBA said the New Zealand economy showed some signs of improvement in the quarter, but operating conditions remained challenging.

ASB experienced good volume growth in home lending and deposits in the quarter but price competition for retail deposits had a negative impact on margins.

The bank also noted stress in the dairy sector in New Zealand in comments in a presentation.

It said ASB's consumer arrears were improving.

CBA chief executive Ralph Norris, who is a New Zealander and former boss of ASB, said the CBA group had performed strongly during the quarter.

"The result particularly benefited from an improvement in our wealth management division as equity markets recovered through the quarter, which may not be repeated," he said in a statement.

Mr Norris said while the economic outlook has improved since in August, the pace and extent of the recovery remains unclear.

NZPA