ASB Bank Grows By 50% In Two And A Half Years And Lifts Surplus To $159.8 Million
Statement made by Gary Judd QC, Chairman, ASB Bank Limited
Continuing momentum as a lender in the business and rural sectors assisted ASB Bank to lift unaudited after tax operating surplus to $159.8 million for the six months ending 31 December 2003. After allowing for the preference dividend payment to ASB Bank Preference Shareholders the underlying period on period comparison represents an increase of 17% to $154.9 million.
Total assets at period end were $30.4 billion, an increase of 10% in six months. ASB Bank has achieved a 50% increase in total assets to $30.4 billion over the past two and a half years.
Home and personal lending still remains our single largest activity, and over the six-month period we increased the level of lending in these areas by 15% to $17.9 billion.
However, we also achieved an outstanding percentage increase in lending to the business sector.
Lending to agriculture increased by 10% in the six months, with our credit exposure at period end being $2.7 billion. Other business lending increased by 3% to $9.4 billion.
Overall, 40% of our lending ($12.1 billion) is now in the rural and business sectors, an increase of 4% in six months, underlining the significant gains we are making in financing the New Zealand economy. A driver of this has been the use of information technology and our Internet banking services, which makes online, real time banking a reality for all business, small and big.
In recognition of the growth being achieved in the business sector, in November we set up a new corporate banking division.
In addition to volume growth, other significant factors highlighting progress and efficiency include
the continuing improvement in our cost to income ratio. For the six months to 31 December 2003 the ratio reduced to 46.1%, compared to 47.9% for the 12 months ended 30 June 2003.
the increasing return on total average assets to 1.1% (1.07% for the year ending 30 June 2003).
holding our net interest margin at 2.28% for the period, compared to 2.38% for the year ended 30 June 2003.
the return on ordinary shareholder’s funds for the period improving to 26.1% (compared with 25.4%).
our risk weighted capital adequacy ratio at 10.28% against a Reserve Bank of New Zealand minimum requirement of 8%.
We continue to deliver competitive, value for money products and services to our customers, which in turn contributed to the outstanding growth rates we are achieving across all banking sectors.
Interest in managed funds by ASB Bank customers saw the funds as measured by Fundsource increase to $1.39 billion. The uptake of managed funds by ASB Bank customers has been the industry’s fastest each year for the past three years, and Fundsource rates our overall ranking as improving from 9th to 6th in the past six months.
ASB Securities (our share broking firm) significantly increased its customer base and the dollar value of shares traded, and has now firmly established itself as an integral member of the New Zealand Exchange.
Customer service, the practical application of innovative technology and local presence remain at the core of ASB Bank’s approach to banking.
We were therefore pleased to be voted number 1 in the University of Auckland’s survey of banking satisfaction for personal banking (for the sixth consecutive year) and business banking (fifth consecutive year) when the latest survey was released in October 2003. We regard the University’s survey as the definitive independent measure of customer service, and we have set ourselves the goal of retaining our leadership position.
For the second consecutive year our Fastnet Classic Internet banking service received the Telecommunications Users Association (TUANZ) Award for the best financial service. We also became the first New Zealand bank to enable online customers to stop their paper statements being sent to them, and introduced the technology to allow our customers to access their bank account from their mobile telephone.
During the period the Bank also committed to two new major sponsorships, naming rights to Television New Zealand’s morning business programme (now named ASB Business) and a multi million-dollar sponsorship of the University of Auckland’s world-class business school.