The ASB Bank has reported a substantially improved profit for the year to June, helped by improved economic conditions, ASB incoming chairman Gavin Walker says.
Operating profit was up nearly 16%, to $886 million, compared with $766 million in the previous corresponding period (pcp).
Operating income improved 12.8%, to $1.6 billion. Operating expenses rose 9.4%, to $721 million, but that was driven by investment in strategic initiatives and Christchurch assistance and support packages.
The net interest margin increased 0.2%, to 2.08%.
The bank also reported it had decreased its impairment expenses 42.4%, to $72 million, compared with $125 million in the pcp.
"New Zealand is continuing along the road to recovery from the global economic downturn."
Another key factor had been customers continuing to shift from fixed to floating-rate loans The re-pricing of some new fixed-rate loans had also contributed, Mr Walker said.
The ASB's profit after tax rose to $568 million in the period, the highest level in at least five years and more than double last year's profit, which included a one-off tax payment of $209 million.
Mr Walker said the balance sheet remained strong, with a 7.1% growth in retail deposits to $33.7 billion and steady lending volumes.
Demand for lending had weakened as customers continued to choose to pay down debt.
"New Zealand's improved export commodity prices, growing demand for limited housing stock in some regions and low interest rates are all expected to contribute to New Zealand's steady economic recovery."
