Arab Today, arab today asb bank reports record 372m profit
Last Updated : GMT 09:27:54
Arab Today, arab today
Arab Today, arab today

ASB Bank reports record $372m profit

Arab Today, arab today

Arab Today, arab today ASB Bank reports record $372m profit

Wellington - Arabstoday

A positive contribution from derivatives trading and a resilient economy helped drive ASB Bank\'s first half statutory net profit to a record $372 million, up 31.3 per cent from the previous corresponding period, the bank said today. The bank\'s result for the six months to December 31 compared with a statutory net profit of $283 million in the year-ago period. Contributing to the result was a period-on-period increase in after tax fair value gains from derivatives of $48m. Excluding these movements from both periods, the bank\'s statutory net profit would have grown by 12.9 per cent, it said. Meanwhile ASB\'s parent company, Commonwealth Bank of Australia, which has along with the other major banks attracted negative media attention for raising interest rates in the last few days, reported a statutory net profit of A$3.62b for the six months -- up 19 per cent. ASB chief executive, Barbara Chapman said ASB\'s performance was influenced by a combination of factors, including healthy revenue growth and productivity gains. \"More broadly, the strong result should also be seen in the context of the current low credit growth environment, which has seen constrained growth in lending and balance sheet size,\'\' Chapman said in a statement. Contributing to the performance was a fall in impairment losses of 61.1 per cent compared to the same period last year, as a consequence of improving asset quality over all sectors, including business lending, Chapman said. Another key factor was the ongoing trend among home owners to switch from fixed to floating rate home loans - with floating rate home loans now representing a significant part of ASB\'s home loan portfolio. In the six months since July 2011, there had been growth in business lending as the market shows indications of increased activity. This contributed to a $128 million increase in lending over the period from June 2011. Business customers have also continued to shift from fixed to floating rate loans, she said. ASB\'s operational expenses remained almost unchanged on the previous comparable period. The bank experienced strong demand for retail savings products in a competitive market with retail deposits in particular showing robust growth of 7.9 per cent from a year ago to $35.4b. \"While a level of ongoing caution in the market has seen New Zealanders focus on paying down debt and deleveraging, the sustained growth in deposits has helped to offset a relatively subdued lending market,\'\' she said. Looking ahead, Chapman said the global economic uncertainty was a \"cloud on the horizon\' that had the potential to jeopardise New Zealand\'s fragile recovery. \"We are closely watching overseas markets as the European debt crisis unfolds, particularly the degree to which this will impact funding costs and business confidence over the next few months,\'\' she said.

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