Sharechat Logo

ASB's profit near halves due to one-off tax charges

Wednesday 11th August 2010

Text too small?

ASB Bank's bottom line annual profit nearly halved, dragged down by a one-off $209 million additional tax charge from its structured finance transactions.

ASB's statutory net profit fell to $236 million for the year ended June 30 from $425 million the previous year. Excluding the one-off tax charge, net profit was $428 million compared with $431 million the previous year.

“ASB continues to maintain a strong and stable position in a difficult market,” ASB chairman Gary Judd said in a statement.

The bank's charges against profit for bad loans also nearly halved to $125 million from $238 million the previous year.

“This sizeable reduction reflects both New Zealand's emergence from the current economic cycle and the underlying quality of the ASB loan book,” Judd said.

ASB's home loan book rose 2% to $38.4 billion and its market share remained steady at 23%

Its quarterly general disclosure statement (GDS) for the year, which allows detailed analysis of aspects of the bank's performance such as its share of the mortgage market, won't be available until about the end of August.

However, figures prepared for the Good Returns website and derived from the capital adequacy notes of all the home lending banks, show ASB's share of the mortgage market fell to 24.12% at March 31, 2010 from 24.45% at June 30, 2009. In dollar terms, ASB's mortgage book grew 2.1% to $37.91 billion in those nine months.

Today's statement says net interest income rose 5.4% to $1.03 billion and other income, which includes fees, fell 26% to $392 million.

The bank says intense competition for retail deposits and the continued high cost of funding held its net interest profit margin steady at 1.6%.

Total deposits stood at $56.2 billion at June 30 with retail deposits increasing 5.3% to $31.5 billion over the year.

Judd says the more than $200 million investment ASB has made in technology renewal, planning for its July 2013 move to its new $160 million headquarters in Auckland's Wynyard Quarter and a commitment to spend $100 million on opening 25 new branches and refurbishing a further 117 over the next five years “shows ASB's confidence in both our future and the future of New Zealand.”

ASB's parent, Commonwealth Bank of Australia reported a 20% rise to A$5.66 billion (NZ$7.15 billion) in net profit for the year but the profit contribution from its New Zealand operations, which also include insurance company Sovereign, fell 11% to A$388 million.

Commonwealth chief executive Ralph Norris says New Zealand “cash net profit” fell 14% to $461 million, reflecting tightening credit markets, increased funding costs and the New Zealand recession.

Commonwealth's “cash net profit” rose 42% to A$6.1 billion.

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

GEN - Equifax reaffirms General Finance Limited's BB rating
General Capital Subsidiary General Finance Market Update
CHATHAM ADVISES EXTENDED CLOSING DATE OF 9 AUGUST FOR SPP
Acceleration of expressway will be transformative for Northland economy says EMA
The Warehouse Group - Proposed Scheme of Arrangement
The Warehouse Group - Proposed Scheme of Arrangement
Winton announces timing of its Annual Results
Fletcher Building Announces Director Appointment
Meridian issues new demand response exercise notice to NZAS
CRP - Chatham Closes Private Placement of Shares