ASB Bank first half profit up 25 percent

ASB, 100 percent-owned by Commonwealth Bank of Australia, posted a net profit of $132.3 million for the six months ended December.

Home mortgage lending was a record $2.72 billion, up 31.2 percent on the same period the previous year.

ASB Bank chairman Gary Judd said today the bank had benefited from a general market recovery following a slow first half the previous year. ASB had also added new financial services and increased productivity.

"In the past 12 months the bank has enjoyed strong growth in residential housing lending and is meeting its objective of above market growth in this key area. Retail funding growth has also performed ahead of target for the period," Mr Judd said.

Total operating expenses increased by 8.5 percent to $201 million, while operating income also gained, up 17.7 percent at $415.4 million.

The bank's pre-tax profit for the six months ended December of $201.5 million was up 29.1 percent on the year before.

ASB's net interest margin of 2.39 percent was up slightly on the previous year's 2.35 percent.

Non-interest sources such as insurance, funds management, sharebroking and card services produced 28 percent ($114.9 million) of income.

Small and medium size business lending increased by 6.8 percent, and business deposits rose 10.2 percent. Rural lending was up 25.4 percent, and total lending increased 17.8 percent to $20.5 million.

Retail deposits, which fund a major proportion of ASB's lending, rose 17 percent in the last 12 months to $24.1 billion.

During the 12 month-period the bank increased staff numbers by 64 full time equivalent employees, bringing staff numbers to 3117, and increased the number of branches by two to 120.

ASB's parent saw a 48 percent fall in net profit for the period across the group to $A622 million ($NZ675 million).

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