ASB's profit, mortgage market share dips

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ASB Bank's December quarter profit slipped, as did its share of the mortgage market.

Thursday, March 18th 2010, 9:18AM 1 Comment

by Jenny Ruth

ASB's December quarter general disclosure statement (GDS) showed net profit slipped 20.8% to $144 million in the three months ended December compared with the same three months a year earlier, mainly because other income, which includes fees and fair value gains and losses on trading assets, fell 31.4% to $118 million.

Net interest income was up 1.6% to $247 million in the three months.

The bank's result for the six months ended December was a $10 million net loss, reflecting a $158 million tax charge on its structured finance transactions following High Court judgements against two other banks.

ASB's charges against profit for bad loans rose slightly to $50 million for the quarter compared with $48 million in the year-earlier quarter. Of the latest quarter's charges, $24 million related to residential mortgages.

ASB's mortgage book grew $246 million to $37.71 billion in the three months and it had another $4.55 billion in off balance sheet mortgages, mostly loans approved but not yet drawn down. Using Reserve Bank figures as a proxy for the market, ASB's new lending accounted for 15.9% of all new lending by registered banks in the three months.

That meant its share of the market eased to 23.26% at December 31 from 23.33% at September 30.

ASB's mortgages with loan-to-value ratios (LVRs) above 80% fell to 14.7% of its book from 15.3% at September 30.

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