Sharechat Logo

ASB lifts FY cash profit 15%, Sovereign posts decline

Wednesday 15th August 2012

Text too small?

ASB Bank, the lender owned by Commonwealth Bank of Australia, had a 15 percent gain in cash profit, while associated insurer Sovereign had a 40 percent decline, giving Australia's biggest bank an overall 9 percent gain in earnings from New Zealand.

CBA's cash net profit from New Zealand rose to $638 million in the year ended June 30, from $588 million a year earlier, the Sydney-based bank said in a statement to the ASX. Total operating income climbed 4.8 percent to $1.8 billion.

Auckland-based ASB's cash profit rose to $580 million in the latest year, from $504 million, which its parent said was driven by an improved net interest margin and lower loan impairment expense.

Sovereign's cash profit dropped to $52 million from $86 million, as insurance income rose 7 percent to $274 million. The drop in profit was attributed to "unfavourable actuarial policy liability valuations, including a decrease in New Zealand government bond rates," CBA said.

Cash net profit is adjusted for fair value movements, one-time items and allocated costs for parent CBA.

At ASB, net interest income rose 10 percent to $1.2 billion, reflecting customers switching to higher-margin floating rate loans from fixed, with the proportion on floating rates rising to 63 percent as at June 30, from 59 percent a year earlier. Home loans outstanding were unchanged at $37 billion.

Other banking income fell 12 percent to $323 million, including lower trading income, transaction and lending fees.

Customer deposits climbed 4 percent to $37 billion, which the lender said reflected customer demand for low-risk investments. Business loans rose 4 percent to $15 billion.

Operating expenses rose 1 percent to $743 million while impairments for bad loans fell 35 percent to $47 million.

Total assets in New Zealand rose to $65.6 billion, of which $63.4 billion is in ASB Bank. That's up from $65.4 billion as at June 30 last year. Total liabilities were little changed at $60.2 billion.

Based on ASB's separately released results, its net interest margin widened to 2.16 percent from 2.01 percent.

CBA's net income rose 11 percent to a record A$7.09 billion, just below the A$7.15 billion forecast in a Bloomberg survey of 10 analysts, helped by a drop in loan impairments and increased lending.

Shares of CBA traded at A$55.54 on the ASX yesterday and have climbed 13 percent this year. The stock is rated a 'hold' based on the consensus of 19 recommendations compiled by Reuters, with a price target of about A$52.08.

BusinessDesk.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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report