Chief executive Vittoria Shortt said 10 percent rise in expenses was the impact of inflation but and ASB's move to invest in systems and staff. Photo: Supplied
ASB Bank has posted a steady full year profit as a sharp increase in expenses offset gains in lending and margins.
Key numbers for the 12 months ended June compared with a year ago:
- Net profit $1.45m vs $1.46b
- Cash profit $1.35b vs $1.37b (excludes one offs)
- Total income $3.36b vs $3.27b
- Total expenses $1.42b vs $1.29b
- Provisions $60m vs $70m
- Net interest margin 2.27% vs 2.23%
The bank increased home and business lending roughly in line with the increase in deposits, while its net interest margin -- a broad measure of profitability -- also edged higher.
Chief executive Vittoria Shortt said the result showed the slower overall economy of the past year and the financial pressures on its customers, but conditions were improving.
"While there is uncertainty in the global environment, lower inflation and falling borrowing costs have provided some respite for households and businesses and our exports have held up."
"The majority of our borrowers are managing in the current environment, although there is no question this is a challenging time for a lot of New Zealanders."
She said the 10 percent rise in expenses was the impact of inflation but also ASB's move to invest heavily in systems and staff.
"We have made significant investments in our technology and systems, meeting regulatory requirements and spent more than $100 million on the prevention of cybercrime, financial crime, and fraud and scams."
She said it had hired an additional 768 staff, some of whom had been taken on to cope with the volume of borrowers refixing mortgages.
Shortt said the investment in anti-scam technology and systems had helped to reduce the level of fraud by nearly a third.
At the same time it was also preparing for an expansion in open-banking which would allow fintech companies to connect and offer alternative financial products and services.
"To reduce barriers to entry, we have extended our open banking fee waiver for fintechs until December 2026."
However, Shortt said overseas experience showed open banking has not captured as much of the banking business as expected.
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