Key Points:

ASB Bank, a unit of Commonwealth Bank of Australia, today reported its December half year net profit rose 12 per cent to $266 million.

CBA shares plunged over 5 per cent yesterday in its biggest fall in eight years when it missed earnings forecasts and announced high provisions for doubtful and bad debts.

Chairman Gary Judd said excellent customer service had allowed ASB to increase profit against a backdrop of a slowing New Zealand economy.

Total assets rose 15 per cent to $56.1 billion.

Intense competition continued to push margins lower, with ASB's net interest margin moving down to 1.8 per cent from 1.9 per cent a year earlier.

The bank maintained its share of the home lending market, balances having grown by 11.9 per cent since December 2006.

Mr Judd said the bank was benefiting from turmoil in the finance industry sector.

Annualised total deposits increased by 14.4 per cent to $50.6 billion and total retail deposits ended the half-year 15 per cent ahead at $26.2 billion.

Growth was also underpinned by strong customer demand for innovative savings products, he said.

ASB's focus was on improving efficiency and customer service.

Two new branches were opened during the six month period - Papamoa in July and Albany in September 2007. A further nine new branches are scheduled to be opened in the second half of the financial year.

CBA yesterday missed profit estimates with a 4 per cent rise in first-half earnings.

It was dented by higher funding costs and bad debt charges.

CBA said that turbulence on global credit markets had seen its wholesale funding costs rise by about A$100m ($115m) before tax, while it also increased provisions for bad loans by 71 per cent to A$333m.

CBA, Australia's top mortgage lender and the biggest retail bank, reported July-December cash earnings of A$2.385 billion versus a revised A$2.296 billion.