Source: Radio New Zealand
RNZ / Marika Khabazi
ASB Bank has reported a flat half-year profit as higher expenses offset higher improved lending and margins.
Key numbers for the six months ended December 2025 compared with a year ago:
- Net profit $765m vs $763m
- Cash profit $719m vs $714m (excludes one-offs)
- Total income $1.84b vs $1.78b
- Operating expenses $839m vs $695m
- Bad debt provisions $3m vs $17m
- Net interest margin 2.35% vs 2.29%
The bank’s profit showed improvement in key areas of increased lending, larger margins, and improved income, but was balanced by a significant rise in expenses because of the settlement of the a class legal action over credit disclosures.
Chief executive Vittoria Shortt said the bank was seeing signs of economic improvement and that was flowing through into business.
“We are seeing more confidence in the economy, supported by lower interest rates and good export earnings in key sectors.”
“This is evident in the uptick we’ve seen in business lending, with more lending growth across small business, commercial and rural this half than in the previous financial year,” Shortt said.
Overall lending rose 6 percent to $118.7b, with housing loans up 8 percent, and rural and business lending 4 percent.
Total customer deposits rose 5 percent.
Banks have been competing for market share in the housing market, amid falling interest rates and large numbers of borrowers refixing their mortgages.
Net interest income – the difference between what the bank borrows at and charges for loans – increased 8 percent, while net interest margin, regarded as a measure of profitability, rose six basis points to 2.35 percent because of timing effects from interest rate hedges.
The amount set aside for bad and doubtful debts fell to $3m from $17m.
Expenses surge on case settlement
ASB’s operating expenses surged 21 percent to $839m, mostly because of the $135.6m out of court settlement of a class legal action brought by former consumer for alleged breaches of credit disclosure rules.
ASB never accepted liability, but said the settlement was a “pragmatic” way to settle the issue.
Shortt said ASB had spent more on improving its anti-scam defences and engaging with affected customers.
She said the bank, owned by Australia’s CBA, was also improving its technology to simplify its processes and offer better products to customers, as well as advance its own lending for social housing and business technology investment.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
