New Zealand

A continued disciplined approach to the execution of the Group's five strategic priorities has delivered another good result.

New Zealand

New Zealand's cash net profit after tax was NZ$461 million, a decrease of 14 per cent.

The result reflects the impact of tightening credit markets, which has led to increased funding costs along with the recession in New Zealand impacting the banking and insurance businesses.

ASB Bank delivered a cash net profit after tax of NZ$354 million, a decrease of 13 per cent, which was achieved in a very challenging environment for the New Zealand banking industry.

The key drivers of the ASB underlying result were:

  • As part of its strategy to grow local funding and reduce reliance on the wholesale funding market, ASB offered competitive term investment rates to customers. This resulted in a 3 per cent increase in retail deposits to NZ$31 billion with the corresponding market share improving slightly to 21.6 per cent;
  • Home loan balances increased 2 per cent to NZ$38 billion;
  • Business lending market share increased to 9.3 per cent; and
  • Impairment expense decreased 47 per cent due to a continuing improvement in the underlying economy, including lower unemployment and stronger business sentiment.

Sovereign Insurance's cash net profit after tax was NZ$103 million, a decrease of 13 per cent. Despite a fall in share of new business sales to 27 per cent, Soverign continues to lead the market in new business sales.