Its net profit was down by 5%
ASB has released its half-year financial results and has announced a statutory net profit after tax (NPAT) of $599 million for the six months ended 31 December 2019 - down by 5% on the prior six month period.
ASB says this decrease was partly down to the one-off $28 million loss on the sale of Aegis, its funds administration business.
Cash NPAT was recorded at $614 million, flat on the prior comparative period. Advances to customers were up by 5% to $89 billion, and customer deposits increased by 4% to $68 billion. Operating income growth was 1%, while operating expenses grew by 7%.
The Commonwealth Bank of Australia (CBA) also invested $2.5 billion in capital in the form of ordinary shares, in anticipation of the higher capital requirements announced by the Reserve Bank in 2019.
ASB chief executive Vittoria Shortt says the results are reflective of the low interest rate environment and an “uncertain” global outlook, but that ASB would continue to invest in its customers.
“A key feature of the past six months has been the low interest rate environment with rates dropping to historical lows, and we’re conscious that, while low interest rates are good news for borrowers, for many of our customers with savings it creates a real challenge,” Shortt commented.
“We continue to focus on investing in innovation so our customers, our communities and our people can build the financial future they want.”
“We are providing our customers with more access to expert advice and digital tools, to help them make informed decisions for their financial wellbeing,” she added.
“Subdued income growth in a low interest rate environment, combined with our ongoing strategic investments in our people, digital and risk capabilities have impacted our cost-to-income ratio. Ultimately, we believe that these long-term investments will provide a better banking experience for our customers and a safer, more secure New Zealand.”
