ASB has reported a 10 percent increase in its half-year profit to a fresh record, as it benefited from stronger home and business lending.
The bank's net profit for the six months ended December was $840 million, while its cash profit, excluding one-offs, was up 11 percent to $822m compared to the prior corresponding period.
Home lending was up 5 percent to $73.4 billion, while business lending was up 6 percent to $21.1b. However, rural lending fell 2 percent to just under $11b.
Its net interest income was up 21 percent to $1.54b, driven by a 5 percent growth in average interest earning assets and a 33 basis point increase in net interest margin to 2.52 percent.
However, tougher economic conditions meant bad and doubtful debts cost the bank $49m, compared with last year's gain of $13m.
Chief executive Vittoria Shortt said 2023 would be a challenging year for home loan customers, especially for those experiencing large interest rate increases.
"Even though loan approvals are tested at rates significantly higher than the approved rate, we want to make sure customers are well placed to manage as these rates come up for renewal," she said.
"We've already reached out to more than 4000 of our home loan customers to help them understand the options open to them, and by the end of the year, we expect to have contacted a further 9000 customers who could face financial challenges."
The bank said it has also responded quickly to customers affected by the recent North Island floods, including offering a one-off $2000 payment to ASB customers whose homes were red or yellow stickered and businesses that were significantly affected.