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ASB posts $124m Sept qtr loss but underlying profitability rises

ASB Bank has reported a $124 million bottom line loss for the September quarter, reflecting a $77 million charge for bad loans plus a $208 million charge for tax due on structured finance transactions going back to 2001.

Thursday, November 19th 2009, 4:51PM 1 Comment

by Jenny Ruth

However, the bank's underlying profitability rose strongly.

ASB says it has provided for the structured finance transactions "in light of recent High Court judgements".

In early October, the High Court decided Westpac owes the Inland Revenue Department nearly $1 billion on its structured finance transactions and in July the National Australia Bank-owned Bank of New Zealand lost its case worth $564 million before penalty charges. Both banks are appealing.

ASB's net loss compares with a $94 million net profit in the September quarter last year.

Its $77 million charge for bad loans is up from just $19 million in the September quarter last year. Of this year's charges, $41 million, or 53.2%, relate to residential mortgages. In the year ended June, residential mortgages accounted for only 31% of total charges for bad loans.

The bank's net interest earnings were up 7.9% to $259 million for the quarter while total operating income was up 17% to $365 million. Total operating expenses rose just $2 million to $168 million.

ASB's mortgage book grew by $335 million to $37.47 billion in the three months ended September. Using Reserve Bank figures as a proxy for the market, ASB accounted for 21.9% of new lending on mortgages by registered banks in the quarter while its market share at September 30 was 23.3%.

ASB had another $4.62 billion in off-balance sheet mortgages, those approved but not drawn down.

ASB's mortgages with loan-to-value ratios (LVRs) above 80% fell to 15.3% of its book from 15.9% three months earlier.

« Allied Kiwi says insurance sales up 50%ANZ's mortgage book shrinks, jumps or subsides - take your pick »

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Comments from our readers

On 26 November 2009 at 10:13 am Babu said:
"Underlying profitability rose strongly". This suggest that bank is doing extremely well. ASB is the only bank to be greedy in this hard times by charging at least 0.20% more on fixed interest rates, in comparison with all other banks. ASB will never compromise their profit...despite inflicting severe pains to their own customers. Wake up call for customers...
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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.65 ▼7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 ▼7.84 7.35 ▼6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼7.24 6.75 ▼6.39
Median 8.64 7.19 7.27 6.65

Last updated: 28 May 2024 11:21am

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