By Gareth Vaughan
Speaking in New Zealand in March Commonwealth Bank of Australia (CBA) CEO Ian Narev said the best measure of a bank's profitability was return on equity.
He'd therefore be happy to see CBA's subsidiary ASB with a higher return on equity than its major domestic competitors. Based on annualised profit up to March 31, ASB's return on equity comes in at 18.2%, according to interest.co.nz calculations. Second, at 14.4%, was ANZ, followed by BNZ at 13.2%, and Westpac at 11.4%. All figures are calculated using figures in the banks' general disclosure statements.
Based on other key profitability measures released in the banks' half-year financial results, BNZ has the highest return on assets, and the equal lowest cost to income ratio with ASB. ANZ has the highest net interest margin.
| Bank | Return on equity | Return on assets | Net interest margin | Cost to income ratio |
| ANZ | 14.4% | 1.1% | 2.49% | 44.7% |
| ASB | 18.2% | 1.1% | 2.22% | 40.3% |
| BNZ | 13.2% | 1.27% | 2.40% | 40.3% |
| Westpac | 11.4% | 1.20% | 2.38% | 42.5% |
*ASB figures excluding return on equity are for the six months to December 31, 2012, the other banks' figures are for six months to March 31, 2013.
In terms of half-year cash earnings, ANZ recorded an $87 million, or 14%, rise to $699 million, ASB a $24 million, or 7%, increase to $348 million, BNZ a $2 million, or 0.5%, rise to $387 million, and Westpac a $24 million, or 7%, increase to $370 million.
Combined the four recorded a $99 million, or 6%, rise in cash earnings to $1.804 billion. That compares with a combined $392 million, or almost 30%, rise in cash earnings last year.
See our story on ANZ's half-year results here.
See our story on ASB's half-year results here.
See our story on BNZ's half-year results here.
See our story on Westpac's half-year results here.
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