ASB annual profit up 6% in a year of two halves

ASB Bank's net profit rose 6% to $1.56 billion in the 12 months ended June 30 from $1.47 billion a year earlier.

Total lending for the year increased 4%, with home lending up 3% and business lending up 5%. Cash net interest margin (NIM) increased by 22 bps.with net interest income up 17.2% at $3.05b. Net interest margins widened 22 basis points to 2.44%, which parent CBA said reflected higher deposit margins in the rising interest rate environment, offset by lower lending margins due to swap rates, mortgage competition and an unfavourable lending mix.

Residential mortgage lending grew 2.8% to $75.65 billion, lagging behind the wider credit growth, while corporate lending grew 6.1% to $30.32b.

ASB’s impairment charges rose to $64 million in the year from $41 million a year earlier as inflationary pressures, rising interest rates and declining house prices started to bite.