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Mortgage Rates Daily Commentary
Thursday 23 September 2021  Add your comment
Co-op rate increases; Smaller hikes to follow next month; Full licensing latest

The Co-operative is the latest bank to increase pricing on six month to five year terms today. Its one year special goes to 2.85%, level with ASB and Westpac.

Banks are poised to raise interest rates further next month despite a recent wave of increases in recent weeks: [READ ON]

Slow progress so far on the journey towards full licensing. Here's what the FMA said after approving 80 FAP licenses: [READ ON]

 

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ASB reports record half

ASB has delivered a record half-year profit, backed by strong lending growth although competitive forces kept pressure on lending margins.

Wednesday, February 10th 2016, 11:49AM

ASB has reported an after-tax profit of $474 million for the six months ended December 31, up 7% increase on the same period a year earlier.

Advances to customers were up 10% to $68.7 billion and the bank reported funds management income growth of 17%.

ASB's loan impairment expense was $41 million, up 11%.

ASB chief executive Barbara Chapman said the result reflected strong balance sheet growth, market share gains in targeted growth areas and sustained momentum in funds management. “Our strategy has seen us continue to invest in building frontline capability in specialist areas such as our commercial and rural teams. At the same time, we have remained focused on maintaining our leadership position in technology and innovation. This has allowed us to deliver a solid first half performance in a highly competitive market.”

Growth in customer advances reflected increasing business, commercial, rural and personal lending and home loan growth improving to be in line with market. ASB’s focus on customer deposits has resulted in strong deposit growth of 9%.

“The largest single contribution to the change in net interest margin is the trend of customers taking advantage of the current low interest rate environment,”  Chapman said. “Against the background of a highly competitive market for both lending and deposit products, we have also seen a continued customer preference for lower margin fixed-rate mortgages."

Cash net interest margin decreased by 13 basis points on the prior comparative period and 6 basis points on the prior half to 2.27%. Underlying net interest margin is down 3 basis points on the prior comparative period and up 2 basis points on the prior half when the fixed rate prepayment recoveries recorded in other income are included in net interest earnings with the associated expense. 

“The success of our Wealth and Insurance business has contributed to the result with sustained momentum in funds management achieving income growth of 17%,”  Chapman said. “In addition, around 40% of customers now have ASB Wealth & Insurance products as they recognise the benefits and convenience of holding these products with their main bank. This has allowed us to meet the needs of a broader range of customers, particularly in relation to insurance products.”

On a cash basis, operating income growth was 7% up on the prior comparative period with a strong improvement in the expense to income ratio of 100 basis points to 37.2%. Operating expenses increased by 4%, partly driven by ongoing investments in technology.

“The financial services industry is evolving rapidly as customers embrace digital technology to access and manage their finances,”  Chapman said. “Providing our customers the most seamless and innovative mobile and online experiences remains a core strategic focus and this has resulted in a steady stream of enhancements to our ASB Mobile banking platform. Customers are benefitting from a range of new mobile services such as our award-winning Card Control function, which has gained around 100,000 unique users since its launch in 2015. This in turn has accelerated the customer shift to mobile banking; in the last year alone, users of the ASB Mobile app have grown by around 37%.

“New Zealand’s rural sector continues to face headwinds, particularly in relation to volatile international commodity prices,”  Chapman said. “Despite this uncertainty, our rural book remains sound, reflecting good credit management. Our priority has remained on looking beyond the current cycle and supporting our customers in the sector as they manage their farms and businesses through this challenging period. That said, we have increased our level of provisioning for the rural portfolio to reflect the challenges the sector is currently facing.”

 

Tags: ASB Barbara Chapman

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲2.85 ▲3.25 3.55
ANZ 4.44 ▲3.20 ▲3.59 ▲4.00
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.60 ▲2.99 ▲3.40
ASB Back My Build 1.79 - - -
ASB Bank 4.45 ▲2.85 ▲3.25 3.55
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲2.85 ▲3.25 ▲3.55
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 ▲3.45 ▲3.85 ▲4.15
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.35 2.75 3.05
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 ▲3.80 ▲4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 ▲2.95 ▲3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.99 3.39 3.59
SBS Bank Special - 2.49 2.89 3.09
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.65 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.85 ▲3.25 ▲3.49
The Co-operative Bank - Standard 4.40 ▲3.35 ▲3.75 ▲3.99
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 ▲3.45 ▲3.85 4.09
Westpac - Offset 4.59 - - -
Westpac Special - ▲2.85 ▲3.25 3.49
Median 4.54 2.95 3.25 3.49

Last updated: 23 September 2021 8:11am

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