ASB Chief Executive Victoria Shortt says the bank's third party distribution via mortgage advisers has not changed much during the year and sits at 62%.

Lending volumes for the period have been above system growth, but it is unclear if that will change in future results following the decision to end the previous arrangements with AIA and NZ Home Loans.

While there are signs the Australian parents of the big banks in New Zealand are pulling back from mortgage advice distribution, Shortt indicates that is not the case for ASB.

“I can only speak for ASB. I think we're pretty consistent, year in, year out.”

“The bigger change is more what came out of the market study, and that's where, you know, customers need to be presented with three options now.

“That's probably been one of the bigger changes that we probably have seen in a year.”

She said she supported the move.

Shortt says the bank has been absorbing the increasing funding costs of home loans.

She uses the example of a one-year home loan. During the year the funding cost for this term had increased 83 basis points but the customer rate was only up 40 basis points.

Shortt’s comments came as the bank reported net profit after tax of $1.3 million for the 12 months ending June 30. This was down 2% on the previous year.

During the year, ASB’s lending to customers totalled $121.5 billion, up from $114.7 billion previously.

Most of this was for residential mortgages, which totalled $85.5 billion, from $80.8 billion.

Operating expenses grew 16% to $1.65 million, predominantly driven by the settlement of the Credit Contracts and Consumer Finance Act 2003 class action proceedings, increased costs due to inflation, and hiring more people to support greater levels of investment in technology.

Shortt says the result keeps the bank in a strong position to support customers as the country prepares for economic growth once again.

“Economic recovery has been very stop start.  Although we had momentum at the beginning of the financial year, it’s been a very different second half.  The conflict in the Middle East and subsequent global oil price shock have caused significant disruption, changing the inflation outlook and pushing interest rates up faster than anticipated.

“Our focus has been on supporting customers experiencing higher costs and uncertainty, while continuing to invest in services and experiences that make a difference.”

“While we expect economic momentum to return in the coming months, uncertainty remains the new norm and we’re cognisant that many New Zealanders will continue to face cost pressures.”

ASB became the first bank to offer joint home loan applications digitally, removing the need for eligible applicants to meet with a banker.