ASB estimates $285 million exposure to NZ tax case

ASB Bank's exposure to tax liabilities from disputed structured finance transactions is less than a third of rival bank Westpac's.

ASB's parent, Commonwealth Bank of Australia (CBA), today disclosed to the ASX that the total tax in dispute with the Inland Revenue Department (IRD) in New Zealand involving the transactions is $285 million.

That figure included interest and was for tax assessments between 2001 and 2004. IRD commissioner Robert Russell last week welcomed a ruling from the High Court at Auckland against Westpac and said $961 million of back taxes were payable.

This wiped 25 basis points off parent Westpac Banking Corp's Tier One capital ratio.

BNZ also lost a case it is appealing that cost it $661m. ANZ faces a fight over $562m. Analysts had estimated the ASB exposure at $280m.

CBA said ASB had partly provided for the tax bill, and the remainder could lower its Tier 1 capital by six basis points.

CBA has been run by New Zealander Ralph Norris for four years. Mr Norris was chief executive of ASB from 1991 to September 2001. He started with the bank in 1969.

The IRD is yet to decide possible penalties in the cases.


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Pay up this money belongs to NZ.

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