Result driven by a 4% growth in total lending
ASB racked up a 10% lift in its half-year profit, reporting an unaudited net profit after tax (NPAT) of $840 million for the six months to Dec. 31, up $78m from $762m in the prior comparative period.
The result was driven by 4% growth in total lending, with home and business lending up 5% and 6%, respectively, compared to that of the first half of FY22. Total regulatory capital held by ASB rose in the 12 months to December by $1.9 billion to $10.8 bn.
The profit jump came as the bank’s cash net interest margin – the difference between the income generated from credit products like mortgages, and the interest paid out to deposit savers and others the bank borrows from – climbed by 33bps to 252bps (cash basis) in a rising interest rate environment.
ASB CEO Vittoria Shortt said the bank knows this year will be challenging for its home loan customers, especially those experiencing big interest rate rises.
“Even though loan approvals are tested at rates significantly higher than the approved rate, we want to make sure customers are well placed to manage as these rates come up for renewal,” she said. “For many, it will be the first time they experience the impacts of increased interest rates.
“We’ve already reached out to more than 4,000 of our home loan customers to help them understand the options open to them, and by the end of the year, we expect to have contacted a further 9,000 customers who could face financial challenges.”
The bank also reported a 21% rise in its total capital to $10.8bn, $62m increase in impairment losses on financial assets, a 10bps fall in cost-to-income ratio (cash basis) to 33.9%, and a 17% lift in its operating expenses (cash basis).
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