Photo: RNZ / Marika Khabazi
The country's number three bank has come through the recession with an increased half-year profit on improved lending and margins.
Key numbers for the six months ended December 2024 compared with a year ago:
- Net profit $763m vs $749m
- Cash profit $716m vs $707m (excludes one-offs)
- Total income $1.78b vs $1.70b
- Net interest income $1.55b vs $1.47b
- Bad debt provisions $17m vs $10m
- Net interest margin 2.30% vs 2.21%
The bank's profit dip last year proved to be temporary as borrowing demand increased, and it paid less for deposits which improved its income and margins.
Chief executive Vittoria Shortt said the result was a reflection of the improving broad economy, which had been in recession for part of the second half of last year.
"New Zealand has been through the most difficult economic cycle in a generation, and we need to be patient with what looks like a gradual recovery.
"With lower interest rates and inflation providing some relief, and export incomes looking up for a number of sectors, our focus remains on supporting customers and providing capital for the next phase of economic growth."
Overall lending rose 4 percent to $112 billion, with housing loans up 5 percent, and rural and business lending up 2 percent.
Shortt expected households to gain from lower rates as they refixed mortgages through the year.
"Around 45 percent of our fixed home loan customers are expected to roll onto a lower rate by the end of June, and 70 percent by Christmas."
Banks have been competing for market share in the housing market, with ASB cutting its rates three times in a month, reflecting the fall and expectation of more falls in wholesale rates.
Open banking and scam prevention
ASB's cost of doing business, however, rose as it spent more on upgrading systems for open banking and strengthening its defences against scams.
"Our open banking infrastructure is in place and to encourage early-stage uptake we're providing it free to third-party providers for the first 12 months," Shortt said.
Legislation to protect consumer data in open banking is currently going through Parliament.
She said there was 16 percent rise in scams and fraud, but customer losses had been reduced with $29 million of suspicious transactions stopped and more than 100 fake ASB websites taken down.
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