Market share gains helped push ASB's interim profit up 7 per cent to a record $474 million.

Loans to customers rose 10 per cent to $68.7 billion on the back of growth in business, commercial, rural and personal lending, the bank said.

Deposits increased 9 per cent, while total operating income rose 7 per cent to $1.1 billion.

ASB's loan impairment expense in the half-year rose 11 per cent to $41 million.


"The [impairment] increase was in line with expectations following strong lending growth and increased rural provisioning, partly offset by improvements in home loan arrears," the bank said.

Chief executive Barbara Chapman said the result reflected market share gains and sustained momentum in funds management.

ASB's rural loan book remained "sound", reflecting good credit management, despite the dairy slump and the financial pressure that was putting on farmers, she said.

"Our priority has remained on looking beyond the current cycle and supporting our customers in the sector as they manage their farms and businesses through this challenging period," Chapman said.

"That said, we have increased our level of provisioning for the rural portfolio to reflect the challenges the sector is currently facing."

The bank said its net interest margin decreased by 13 basis points on the same period a year earlier to 2.27 per cent.

"The largest single contribution to the change in net interest margin is the trend of customers taking advantage of the current low interest rate environment," Chapman said.

"Against the background of a highly competitive market for both lending and deposit products, we have also seen a continued customer preference for lower margin fixed-rate mortgages."

ASB's parent, Commonwealth Bank of Australia, reported a 4 per cent rise in interim profit to a record A$4.8 billion (NZ$5.1 billion).