ASB may have provisioned about A$20 million for the February 22 Christchurch earthquake

ASB may have provisioned about A$20 million for the February 22 Christchurch earthquake

By Gareth Vaughan

ASB, the only one of the big four banks not to have disclosed its expected financial hit from the devastating February 22 Christchurch earthquake, is likely to have provisioned about A$20 million to cover credit losses stemming from the quake, according to Macquarie analyst  Craig Turton.

In a research report covering last week's third quarter trading update from ASB's parent Commonwealth Bank of Australia, Sydney-based Turton notes what he describes as a "relatively small NZ quake overlay circa $20 million."

Asked to comment on this an ASB spokeswoman said neither ASB nor CBA had yet published a figure relating to ASB provisions for the Christchurch earthquake.

The other three major banks - ANZ, BNZ and Westpac - all commented on their earthquake provisioning in their recently released results for the half-year to March. ASB and CBA have a different reporting calendar to the other big three Australasian banks, and reported half-year results for the six months to December in early February before the earthquake hit.

ANZ said it had re-allocated existing collective provisioning to cover earthquake costs with CEO David Hisco saying it was still too early to fully quantify the quake’s impact, but ANZ believed it was adequately provisioned.

BNZ said it  was expecting credit losses from the two big Christchurch earthquakes (including the one on September 4 last year) of up to NZ$60 million having made provisions of this size to cover them.

And Westpac said costs associated with the earthquake impacted its cash earnings by about NZ$40 million during the first-half of its financial year. These costs included direct financial support to the Christchurch relief effort, and higher impairment charges of NZ$56 million.

Overall the big four banks made a combined NZ$1.26 billion interim profit, up NZ$312 million, or 33%, from NZ$952 million in the first half of their previous financial years.

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