ASB Bank says there is intense competition for retail deposits and funding costs for banks are still high but it has reported a $428 million net profit after tax in the year to June 30.The profit is after a one-off tax charge of $209m and a perpetual divi
ASB Bank says there is intense competition for retail deposits and funding costs for banks are still high but it has reported a $428 million net profit after tax in the year to June 30.
The profit is after a one-off tax charge of $209m and a perpetual dividend payment of $17m. It compared with a $431m profit in 2009.
"ASB continues to maintain a strong and stable position in a difficult market," chairman Gary Judd said.
ASB is owned by Commonwealth Bank of Australia. It is investing $460m in the business following a strategic review.
This includes $200m in technology renewal and a move in July 2013 to a $160m new head office building based at Auckland's North Wharf in the Wynyard Quarter.
The bank is also spending $100m on its branch network, with 25 new branches and 117 refurbishments, in the next five years.
The bank said intense competition for retail deposits and the continued high cost of funding held its net interest margin on interest bearing assets stable at 1.6 percent.
Total assets declined by 2.6 percent to $63.6 billion during the 12 months. This was largely due to volatility in the derivative instrument market. Lending increased by 0.8 percent to $53.8b.
"ASB led variable lending rates down back in September last year, our continued support of New Zealand homeowners being reflected in an almost 2 percent increase in home loan balances," Mr Judd said.
The bank's home loan market share remaining steady at 23 percent.
ASB said there has been an overall decline of 7.3 percent in the business lending market across New Zealand.
Against this background, ASB's business lending fell only by 1.9 percent to $6.8b, increasing ASB's market share by 0.5 percent to 9.3 percent. Rural lending remained flat.
