ASB profit leaps 22pc as lending flourishes

By RICHARD BRADDELL

WELLINGTON - ASB Bank has reported a 22 per cent jump in net profit to $68.5 million for the six months ending December 1999, up from $56.1 million in the same period of 1998.

If its Sovereign financial services subsidiary had been included, the result would have been $74.2 million, for a rise of 32.3 per cent.

The result comes after strong growth in rural, business and personal lending, with rural rising 30.2 per cent, business 12.2 per cent and personal 12 per cent.

But the bank was also pleased with a 12.8 per cent rise in home-mortgage lending despite falling property prices and sluggish house sales, with a total of $1.32 billion lent during the period.

Total advances of $13.3 billion at December 31 were up 15.1 per cent on the same time a year earlier.

The total operating income of $267.1 million was up 13.2 per cent. But the gradual erosion of interest margins continued so that interest-income growth of 9.9 per cent to $178.2 million lagged behind lending growth.

However, a 20.5 per cent jump in other income to $88.9 million was driven by the bank's expansion in financial services.

Total assets at the end of the period stood at $16.6 billion, up 19.7 per cent on a year earlier.