ASB March quarter profit rises 25% to NZ$132 million despite lending contracting

ASB March quarter profit rises 25% to NZ$132 million despite lending contracting

By Gareth Vaughan

ASB's parent, the Ralph Norris led Commonwealth Bank of Australia, has celebrated a rise in its Kiwi subsidiary's profitability by taking a NZ$200 million, or 8.9 cents per share, dividend last month.

ASB's General Disclosure Statement (GDS) for the nine months to March shows ordinary dividends of NZ$200 million were paid on April 15. The GDS for the nine months to March last year showed ordinary dividends worth NZ$70 million. CBA received NZ$160 million, or 7c per share, in dividends in the year to June 2010 and NZ$180 million, 9c per share, in the year to June 2009.

The bank's unaudited profit after tax jumped by NZ$319 million to NZ$415 million in the nine months to March from just NZ$96 million in the same period of the previous year. The big increase was largely due to a NZ$162 million drop in tax paid with the NZ$340 million coughed up in the nine months to March 2010 including NZ$209 million paid to settle the bank's structured finance transaction dispute with the Inland Revenue Department. The bottom line was also boosted by the bank's drop in impairment losses on loans to NZ$80 million from NZ$133 million.

For the three months to March ASB's net profit after tax rose by NZ$26 million, or 25%, to NZ$132 million from NZ$106 million in the same period last year, with the latter a big move from a NZ$10 million loss in the six months to December 2009. Total operating income for the March quarter rose by NZ$92 million, or 29%, to NZ$408 million.

Lending contracts

Meanwhile, the latest GDS shows ASB's advances to customers down NZ$179 million to NZ$52.808 billion in the three months to March 31, despite its residential mortgage book growing by NZ$48 million to NZ$42.043 billion, as the major banks continue to struggle to grow lending.

ASB's the second of the big four banks to release its March quarter GDS. The first, Westpac, recorded a NZ$82 million drop in total gross loans and a NZ$170 million rise in housing term loans. Westpac paid no dividend to its Australian parent as it preserves capital ahead of the transfer of banking operations to help meet Reserve Bank local incorporation criteria.

ASB's total assets fell NZ$307 million to NZ$63.189 billion, with total liabilities down NZ$439 million to NZ$59.247 billion.

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Wave the loot bye bye as it scoots across the ditch to fatten the banker bonuses....wonder what the ASB mortgage suckers are feeling right now....

They won't be worried at all Wolly, afterall they are going to double their money over the next 5 years because property always goes up in value....doesn't it?