Bank cites Middle East conflict and oil shock for volatile second half
ASB recorded its strongest business lending growth in almost a decade for the year to 30 June 2026, even as cash net profit after tax fell 2% to $1,318 million amid a volatile second half. Statutory NPAT fell further, down 4% to $1,398 million.
Business lending records strongest growth in nearly a decade
Business and farming customers received roughly three times the new lending extended the previous year. ASB Rural lifted its agriculture lending market share to 17.7%, while ASB business and corporate banking, combined with the CBA New Zealand branch, became the country's second-largest business bank. The bank grew its large business lending book by $436 million, or 8.6%, outpacing the broader market's 3.4% growth.
Lending and deposits hold firm despite a rocky back half
Home lending, business and rural lending, and customer deposits each grew 6% over the year, while KiwiSaver funds under management rose 15%. Operating expenses climbed 16% to $1,645 million, a rise ASB attributed largely to the settlement of Credit Contracts and Consumer Finance Act 2003 class action proceedings, inflation-driven cost increases, and additional hiring to support technology investment.
ASB chief executive Vittoria Shortt attributed the result to a shifting economic backdrop.
"Economic recovery has been very stop start,” Shortt said. “Although we had momentum at the beginning of the financial year, it's been a very different second half. The conflict in the Middle East and subsequent global oil price shock have caused significant disruption, changing the inflation outlook and pushing interest rates up faster than anticipated."
She said most customers had managed the disruption reasonably well.
"While it's been a challenging time for some, by and large our customers appear to have weathered the storm well, with fewer households experiencing loan difficulties," Shortt said.
The CCCFA settlement behind the rise in costs was court-approved in January, with ASB paying $135.6 million to resolve the class action, distributed to roughly 191,000 eligible customers.
Digital shift extends to home loans and customer service
More than 350,000 transactions that would previously have required a phone call or branch visit were completed digitally in FY26, with ASB becoming the first bank to offer fully digital joint home loan applications.
The bank also expanded its use of AI tools, including a conversational IVR system in its contact centre, which Shortt said had cut average call wait times by around 40% compared with the previous year, even as headcount grew by more than 360 full-time staff.
Shortt said the bank's focus for FY27 would be on continued support as conditions stabilise.
"We're working closely with customers and are ready to support New Zealand as it puts its foot back on the pedal in FY27..." she said.
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