ASB net profit down 1.9pc

18:19, Feb 13 2013

ASB Bank says it is comfortable with the level of risk it is taking on, after rising bad-debt costs left it just short of raking in another record first-half profit.

The lender yesterday reported a $365 million net profit for the six months to December 31, which was down 1.9 per cent from the previous year's record $372m.

The bank saw strong growth in its lending book and overall revenue, but operating expenses rose and bad debts ballooned 100 per cent to $28m.

Chief executive Barbara Chapman said impairment losses tended to be "lumpy" and were coming off historic lows in the previous period.

Loans that were in arrears were also trending downwards, she said.

The bank's rural and business lending both grew above market levels, recording growth of 12.7 per cent and 9.4 per cent respectively, while its home-loan books grew by 3 per cent.

The banking industry lent much more conservatively following the global financial crisis, but many banks have slowly loosened their criteria in recent years. Fairfax NZ

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