ASB performed well during the first quarter of its financial year, parent Commonwealth of Australia Bank (CBA) says, with income growth steady, margins rising and strong discipline in cost management continuing.
CBA makes these comments in its first quarter trading update filed with the Australian Securities Exchange today. CBA recorded an A$150 million, or 9%, rise in unaudited cash earnings to A$1.75 billion for the three months to September 30 from A$1.6 billion in the same period last year.
Of New Zealand CBA said the economy showed some signs of improvement, despite ongoing disruption caused by the February 22 Christchurch earthquake that killed 181 people. Over the longer-term CBA suggested low interest rates, high commodity prices and reconstruction activity would boost economic growth.
"ASB performed well during the quarter, with steady income growth and continued strong discipline in cost management," CBA said. "Margin continued to benefit from the repricing of the lending book, partially mitigated by price competition for retail deposits."
For the year to June 30 ASB reported a NZ$150 million, or 42%, rise in cash net profit after tax to NZ$504 million as impaired loans fell 42% to NZ$72 million and ASB’s net interest margin rose by 40 basis points to 2.08%. Annual statutory net profit after tax rose 28% to a record NZ$568 million.
ASB's annual operating expenses rose 9% to NZ$721 million, lending contracted 1.2% to NZ$53.2 billion and total assets fell by NZ$500 million to NZ$63.1 billion.
CBA CEO Ralph Norris, set to be succeeded by fellow New Zealander Ian Narev on December 1 after six years in the job, said in the trading update that operating conditions remained challenging.
"Against this background, the Group continued to perform well, highlighted by solid financial outcomes and continued improvements in customer satisfaction scores," Norris said.
"At a time of lower credit demand, the effective execution of our strategic agenda and our continued emphasis on profitable growth is driving consistently good financial outcomes, positioning the Group well for future growth."
"Given the volatile operating environment and economic uncertainty, the Group continues to retain its conservative business settings, with capital, provisioning, funding and liquidity levels all remaining strong."