ASB Bank, the lender owned by Commonwealth Bank of Australia, had a 15 per cent gain in cash profit, while associated insurer Sovereign had a 40 per cent decline, giving Australia's biggest bank an overall 9 per cent gain in earnings from New Zealand.
CBA's cash net profit from New Zealand rose to $638 million in the year ended June 30, from $588 million a year earlier, the Sydney-based bank said in a statement to the ASX. Total operating income climbed 4.8 per cent to $1.8 billion.
Auckland-based ASB's cash profit rose to $580 million in the latest year, from $504 million, which its parent said was driven by an improved net interest margin and lower loan impairment expense.
Sovereign's cash profit dropped to $52 million from $86 million, as insurance income rose 7 per cent to $274 million. The drop in profit was attributed to "unfavourable actuarial policy liability valuations, including a decrease in New Zealand government bond rates", CBA said.
Cash net profit is adjusted for fair value movements, one-time items and allocated costs for parent CBA.