Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

ASB lifts annual earnings 11%, helping drive CBA growth

ASB lifts annual earnings 11%, helping drive CBA growth

By Paul McBeth

Aug. 13 (BusinessDesk) - ASB Bank lifted its annual cash profit 11 percent as it boosted mortgage and business lending, helping drive growth for parent Commonwealth Bank of Australia, while insurer Sovereign's earnings edged up 3 percent.

CBA's New Zealand banking unit increased cash profit to $776 million in the 12 months ended June 30 from $698 million a year earlier, on a 10 percent increase in net interest income to $1.5 billion, the Sydney-based lender said in a statement. Meantime, Sovereign's annual cash profit rose to $103 million from $100 million a year earlier on a 6 percent increase in insurance income to $201 million.

"The result was driven by a solid performance from ASB Bank with strong deposit volumes combined with improved margins and higher funds management income," CBA said in its report. "Sovereign profit increased on the prior year with strong persistency experience and solid growth in inforce premiums."

The New Zealand businesses were CBA's second-best performer in the year, lifting cash profit 19 percent to A$742 million, behind a 21 percent gain in Bankwest's earnings to A$680 million. The bank's group earnings rose 12 percent to A$8.68 billion on an 8 percent lift in total income to A$22.4 billion. The board declared a final dividend of A$2.18 per share, taking the total pay-out to A$4.01.

"We are cautiously positive about the outlook for the 2015 financial year," CBA chief executive Ian Narev said. "Whilst business and consumer confidence levels have remained fragile, the levels of underlying activity confirm the strong foundations of the Australian economy."

ASB increased its mortgage loan book to $41.58 billion as at June 30 from $40.31 billion a year earlier, while business and rural lending rose to $17.56 billion from $16.29 billion. Customer deposits rose to $40.15 billion as at June 30 from $37.72 billion a year earlier.

The bank fattened its net interest margin 13 basis points to 2.38 percent from a year earlier due to lower funding costs. That gain was offset by tight competition for business and home lending, and growth in lower margin fixed rate mortgages.

“Over the course of the financial year, all areas of the business have performed well with solid lending growth across all key portfolios of 5 percent, despite heightened price assertiveness in the home loan market,” ASB chief executive Barbara Chapman said in a separate statement. “The improving New Zealand economy has undoubtedly played a role with rising confidence and solid lending growth, particularly among business and rural customers.”

Sovereign increased its annual in-force premiums to $684 million as at June 30 from $654 million a year earlier, as it managed to improve its lapse rate in risk and health policies. The insurer experienced bigger claims at the beginning of the year.

CBA's ASX-listed shares last traded at A$81.69 and have increased 5 percent this year.

(BusinessDesk)

By Paul McBeth

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Greenpeace: Govt Extends OMV Exploration Permit

The Government has just granted oil giant OMV a two-year extension to drill in the Great South Basin, despite issuing a ban on new oil and gas exploration permits in April. More>>

ALSO:

Collective Bargaining For Contractors: Working Group's Model For Screen Sector

A recommended model to allow collective bargaining for contractors in the screen sector has today been unveiled by the Government-convened Film Industry Working Group. More>>

ALSO:

Kauri Dieback: DOC Closing Tracks To Protect Trees

The Department of Conservation will close 21 tracks across kauri land to help prevent the spread of kauri dieback. An additional 10 tracks will also be partially closed and the open sections upgraded... More>>

Price Of Cheese: Dairy Product Prices Descend

Dairy product prices fell at the Global Dairy Trade auction as whole milk powder slid amid the prospect of increased supply. More>>

ALSO:

Deductible Horses: Peters' Bloodstock Investment Plan

“Cabinet has approved the final design of the bloodstock rules which were first signalled in Budget 2018. Investors new to bloodstock breeding will be able to claim tax deductions for the cost of horses, even if they don't own an existing horse breeding business...” More>>

Petrol Up 19%: Annual Inflation To September 1.9 Percent

The consumers price index (CPI) increased 1.9 percent in the September 2018 year, driven by higher petrol prices, Stats NZ said today. This follows a 1.5 percent annual inflation rate for the June 2018 year. More>>

ALSO: