ASB's parent Commonwealth Bank of Australia released its half-year results to the Australian Stock Exchange this morning.
The bank's net profit after tax fell 5% to $599m after the bank booked a one-off loss of $28m on the sale of Aegis - its funds administration business.
ASB chief executive Vittoria Shortt said the result was consistent with a lower growth operating environment.
"Against the backdrop of a stable economy, we're mindful of a cautious business sector and uncertain global outlook," Shortt said.
"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."
ASB bank's net interest income was down slightly to $1.060 billion and its total operating income rose 1% to $1.383b.
But the bank's expenses jumped 7% to $508m.
ASB Bank interim profit
Six months to December 31 2019, December 31, 2018
Cash net profit after tax $614m $614m
Net interest income $1.06b $1.061b
Operating expenses $508m $474m
Total assets (loans and advances) $100.54b $96.96b
Total liabilities (deposits and debt isssuance) $90.64b $86.77b
Net profit after tax $599m $630m
Its loan impairments fell 51% to $22m.
The bank's growth was boosted by lending growth in both home loans and business lending but its rural lending was down.
Home lending rose 6% to $58.87b and business lending was up 5% to $17.6b. But rural lending was down 2% to $11b.
Deposits also rose 3% to $60.3b.
The gains came as the bank's margin was squeezed down 10 basis points from 2.23% to 2.13%.
Shortt said the margin declined reflected lower interest rates impacting deposit margins.
"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," Shortt said.
Staff numbers at the bank also rose 3% from 4,927 to 5,074.
Shortt said it had been hiring more people than ever before with specialist skills and experience, particularly in areas such as financial and cyber-crime.
"Over the past 18 months, we have employed an extra 150 people in our financial crime teams.
"We are committed to keeping New Zealand safe and addressing the growing volume and sophistication of financial crime," Shortt added.
Over the past six months, the bank had screened more than 960 million transactions to combat money laundering and financial crime and declined fraudulent activity on over 8,500 customer cards.
Commonwealth Bank of Australia made a net profit after tax of A$6.161b - up 34% after making a gain from the sale of its Colonial First State business.
But its cash net profit after tax was down 4.3% to A$4.477b.
