ASB announces half-year results

CEO says result reflects the "strength and resilience" of the economy

ASB announces half-year results

ASB has released its half year results, and has reported a cash profit after tax (NPAT) of $614 million for the six months ended December 31, 2020 – only a 1% decrease on the prior half-year.

Home loan lending rose by 9% on the previous period, and business lending increased by 3%. ASB’s impairment losses, including write-offs and funding for bad debts, increased by $8 million, with CEO Vittoria Shortt commenting that the past 12 months had taught the bank to “expect the unexpected,” and that provisions would be maintained throughout the ongoing uncertainty of the pandemic.

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Shortt said ASB’s overall result reflected the “continued resilience” of the New Zealand economy, and she said ASB’s focus going forward would be to support businesses with more lending, as well as helping first home buyers get on to the property ladder.

“ASB’s half-year result really reflects the strength and resilience of the New Zealand economy,” Shortt commented.

“It also reflects the fact that we’ve been operating in a very low interest rate environment, and despite those features we’ve had a very strong operating performance. This means that we’re sound and we have a lot of capital and liquidity, which in turn helps us really support the New Zealand economy.”

“We’ve had a very strong focus on supporting businesses during this challenging time,” she added.

“Even though the business lending market has declined by 4%, our business lending has increased by 3% - and that’s very important for us. Conversely, we know that the property market has been very hot, and we’ve been taking actions to support first home owners. Over the last six months, we’ve helped 7,500 Kiwis get into their first home.”

Read more: ASB adjusts LVR restrictions

Shortt said that ASB has also tried to moderate some of the appetite for home lending with its investor LVR restrictions, which it recently lifted to 40% minimum equity. She said the bank will also be committing to keeping New Zealanders in their homes, and that there will be no forced sales of owner-occupied homes in 2021.

“Banks play an important role in the financial wellbeing of New Zealanders, and we know the year ahead will be difficult for some,” she said.

“Mortgagee sales are uncommon and they’re always the last resort, however, we are taking this step to give customers added peace of mind during what it a very worrying time for some.”