ASB full-year profit up 39 per cent to $1.32 billion

ASB has released its full year results. Photo / Glenn Jeffrey

Strong lending has helped boost ASB's profit with the bank seeing a 39 per cent rise in its statutory net profit after tax to make $1.321 billion for the year to June 30.

While the bank's cash net profit rose 34 per cent to $1.295b. The cash profit was up $330 million on the prior year when the bank saw a 20 per cent profit fall largely due to Covid-19.

Chief executive Vittoria Shortt said the result was driven by 10 per cent growth in total lending which rose to $99b.

Home lending was up 12 per cent to $67.7b and business lending rose 9 per cent over the year to $19.3b. Rural lending was up 2 per cent to $11.1b.

Shortt said ASB's result reflected New Zealand's stronger than expected recovery.

"While a balanced recovery is still a significant way off, ASB is in a strong position to keep supporting Kiwis as we work together towards a productive and sustainable New Zealand."

The bank's net interest margin rose 6 basis points to 2.18 per cent recovering some of the 11 basis points it declined in the prior year.

The bank noted this was driven by stable funding costs, an increased preference for fixed term loans and at call accounts in the low interest rate environment.

The bank's total operating income grew 8 per cent to $2.972b while its expenses rose 2 per cent to $1.14b as ASB hired more people and boosted its technology.

Shortt said it grew its workforce by 10 per cent as the bank moved quickly to respond to customers' needs.

"More than 500 new roles were created across the year to help us engage with our customers, bring products and services to market faster and meet regulatory change."

Interest bearing deposits at the bank were up just 1 per cent to $64.56b.

During the year it provided 35,000 customer with Covid-19 relief on more than $13 billion worth of lending.

The bank also drew down on the Reserve Bank's funding for lending programme by $4b for initiatives including a low interest rate loan for home building called Back My Build.

Shortt said demand for the loan had significantly exceeded expectations.

"In just over a month, we received applications to support the construction of around 3,000 new homes."