ASB annual profit falls as bank 'embarks on programme of work to streamline practices to create better outcomes for customers'

ASB's annual profit fell 4% as expenses and loan impairments both rose.

ASB's net profit after tax for the June year dropped $51 million, or 4%, to $1.398 billion from $1.449 billion in the June 2025 year.

Although operating income rose $165 million, or 5%, to $3.667 billion, operating expenses climbed $222 million, or 16%, to $1.649 billion with the increase attributed to the bank's $135.6 million class action lawsuit settlement, inflation, and the addition of 360 full-time equivalent staff (FTEs) to support technology investment, taking total FTEs to 7114..

ASB's cost to income ratio, where the bank's operating costs are divided by its operating income, surged 390 basis points year-on-year to 46.4%.

Its net interest margin, the difference between what it borrows money at through the likes of deposits and what it lends it out at, rose three basis points to 2.30%. Net interest income rose $198 million, or 6%, to $3.256 billion.

Net lending rose 6% to $122 billion, with annual impairment losses on loans up $18 million to $78 million. Of the bank's total lending, nearly $86 billion is housing lending. Deposits grew 4% to $97 billion.

"While we expect economic momentum to return in the coming months, uncertainty remains the new norm and we’re cognisant that many New Zealanders will continue to face cost pressures. We’re working closely with customers and are ready to support New Zealand as it puts its foot back on the pedal in FY27 [ the bank's financial year to June 2027]," ASB CEO Vittoria Shortt says.

ASB is owned by the Commonwealth Bank of Australia (CBA). ASB paid annual dividends of $375 million, down from $1.1 billion last year.

CBA posted a 7% rise in cash net profit after tax to A$11 billion. It's paying dividends of A$5.05 per share, or A$8.3 billion, equivalent to 77% of cash profit. CBA's net interest margin dropped three basis points to 2.05%. CBA's return on equity rose 50 basis points to 14%.

CBA says ASB contributed 10% to its group cash profit. It also says ASB's share of the NZ home loan market rose to 21.3% at June 30 from 21.2% a year earlier. ASB's share of business and rural lending rose to 17.8% from 17.4%, and its share of customer deposits rose to 18.9% from 18.8%.

Shortt says ASB grew grew large business lending by $436 million, or 9%, topping overall market growth of 3%.

ASB says it's "embarking on a programme of work to streamline its practices to create better outcomes for customers."  The bank says this complements work it already has underway to modernise its technology and upgrade systems, simplify products and processes, and invest in capacity to combat financial crime capability.

As of June 30, ASB had $296 million worth of loans at least 90 days past due but not impaired, down from $474 million a year earlier. Individually impaired assets were put at $416 million, down from $445 million.

CBA's press release is here, its major financial results announcement is here, and its investor presentation is here.