ASB accelerates mortgage lending and profit margins
ASB Bank continued to accelerate its mortgage lending at above its market share in the six months ended December and managed to lift its profit margin as well.
Wednesday, February 11th 2026, 11:13AM 
4 Comments
by Jenny Ruth
ASB’s disclosure statement showed it added $3.03 billion in net new mortgages in the six months, taking its on-balance sheet mortgage book to $84.44 billion.
That compares with the $2.61 billion of mortgage lending in the six months ended June and $2.28 billion in the six months ended December 2024.
ASB’s parent, Commonwealth Bank of Australia, said ASB’s net interest margin rose 11 basis points to 2.35% from June 30 last year and that was also up from 2.29% in the previous first half.
Higher home loan margins and other gains were partly offset by lower deposit margins “from increased competition.”
ASB’s home lending in the latest six months was 1.3 times system while its deposit growth was 1.2 times system. Turn-around times to decisions in applications through the proprietary channel averaged two days.
ASB’s ability to both grow its mortgage lending so fast and to increase margins at the same time is remarkable in that in the six months ended December 2023 the bank had shrunk its mortgage book by $518 million, with CBA chief executive Matt Comyn having complained about “pricing conduct” in New Zealand eroding margins.
ASB’s net interest income rose 7.4% and its charges against profit for bad debts fell to $3 million from $17 million in the previous first half, but that was offset by a 20.7% jump in operating expenses.
ASB said the latter reflected the impact of it settling the class action against it for failing to advise customers in writing of loan changes.
In October, ASB agreed to settle the case for $135.6 million and the High Court approved the settlement on January 14.
ASB said its investment in people, technology modernisation, digital experience and regulatory compliance also rose.
The settlement meant ASB’s bottom-line net profit barely rose to $765 million from $763 million in the previous first half.
The bank highlighted its KiwiSaver performance, saying that funds under management (FUM) rose more than $1.7 billion to more than $20.6 billion, “thanks to continued strong returns to customers and top quartile performing funds.”
Including other investment products, ASB has more than $31 billion in FUM.
“While the geopolitical outlook remains uncertain, we are seeing more confidence in the economy, supported by lower interest rates and good export earnings in key sectors,” said chief executive Vittoria Shortt.
“This is evident in the uptick we’ve seen in business lending, with more lending growth across small business, commercial and rural this half than in the previous financial year,” Shortt said.
“We remain well-positioned to support our personal and business customers as they continue to tackle higher costs, navigate volatility or transition to growth.”
In November, ASB extended the capability to lodge single home loan applications through its ASB mobile app to include joint home loan applications, she said.
“Customers can track the progress of their application and view indicative pricing in the ASB mobile app so they remain informed at every step.”
CBA reported its net profit for the six months rose 5% to A$5.41 billion with ASB contributing 11%.
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Comments from our readers
It’s always a worrying trend whenever banks like ASB actively encourage customers to avoid dealing with the mortgage adviser channel by been dishonest with their ability to provide pre-approved finance. I’m not sure how mortgage advisers are supposed to be having relationships with banks that do this to us. Both the Commerce Commission and Financial Markets Authority would be very interested to learn the above as this is a clear breach of both consumer law and the recently passed CoFi legislation which all banks must adhere to now.
ASB told us last year that 500 accredited advisers have not sent them a single deal in over 12 months. I wonder what that number will be sitting at in another 12 months’ time if the bank continues on being dishonest with us.
And the head groups? You guessed it. Missing in action as usual.
ASB rates have generally been uncompetitive.
ASB's 35-day refix policy is dreadful, with rates now increasing; it is a massive disadvantage for customers.
It's difficult to recommend ASB.
No surprise to hear ASB are doing this, I wonder if there recent sales figures above, are all inclusive of all channels, including Go Home Loans with AIA, as I understand Advisers have placed higher volumes via AIA than ASB in recent years, due to the far better Adviser relationship structure in place, which ASB is now removing going forward, once an AIA loan is restructured, it will forever leave the AIA platform, and Advisers will lose access to and visibilty of that client data for servicing.
A really dum idea, and does not improve the advice position given to clients, especially when more branches are closing, and all communication is directed via call centres with no personal knowledge of the client, or their situation.
(There is a really really really good reason Life insurance companies distribute their products via Advisers !)
A question to ask the FMA and Commerce Commission:
Why is it ok for NZ banks to incentivise churning of loans across banks in NZ with Cash backs from the banks, when it is banned in Australia to reduce this behaviour, and in Australia the remuneration model for Advisers is the same across banks, with upfront and trail commission, to again deter an Adviser from moving clients bank to bank just for commission,
but also to remunerate Advisers for servicing the clients, and saving the banks many thousands more in overheads.
Am I not right, that the entire reason the Financial Services industry went through licensing, and many legislative changes, was to bring NZ to the same level of most other Western international countries, and raise the industry to a Profession
so consumers could be provided Advice when making a major financial decision ?
If I am right, then why are we (NZ Mortgage Advisers) not following the same service model as in Australia, which we hear the Commerce Commission referring to so many times over recent years, as the standard we should be at or follow?
Let's hope David Seymour reviews our legislation and red tape, rules etc, as for the many of us Advisers who have complied with all the requested changes, the education standards, and increases in business costs, and we see some positive change.
Adviser Man
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ASB branches can provide preapproval for customers over 80% where they block the adviser third party channel from doing so.
ASB branches can hold discount rates for customers for 48 hours for re-fixes, where advisers cannot, and as we are in a rate-increasing market an adviser can quote a rate to the customer, but that rate can change that day without giving that customer enough time to make an informed decision without pressure.
Where are the dealer groups? And the FMA on this, crickets chirping.
ASB then wonders why advisers are not giving them business.