ASB's mortgage book shrinks again
ASB Bank's mortgage book shrank for the fourth successive quarter in the three months ended March but its profitability rose strongly as net interest income surged.
Friday, May 27th 2011, 11:52AM
by Jenny Ruth
ASB's March quarter disclosure statement shows its mortgage book, using the same capital adequacy-based measure goodreturns.co.nz has used since December 2002, shrank by $12 million in the three months ended March to $37.46 billion. It has shrunk by $451 million since March 31 last year.
However, including off-balance sheet mortgages - generally those approved but not drawn down - the measure, derived from each bank's loan-to-valuation ratio (LVR) table, likely to be most comparable between the banks in future, ASB's mortgage book grew $48 million to $42.04 billion.
ASB's lack of growth is in sharp contrast to the strong growth shown by the other three major banks in the March quarter. As previously reported, BNZ's mortgage book grew by a little over $300 million, Westpac's by about $200 million and ANZ National's by about $500 million.
ASB's net profit jumped 24.5% to $132 million for the three months ended March as net interest income climbed 25.9% to $321 million. That took net profit for the nine months ended March to $415 million, a more than three-fold increase on the $96 million it earned in the same nine months a year earlier.
However, ASB's charges against profit for bad loans rose to $44 million for the three months compared to $6 million in the March quarter last year, although the charge for the nine months fell to $80 million from $133 million.
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