ASB’s Rising Costs and Modest Profit Decline Signal Challenges Ahead

Profit and Lending Growth Amid Economic Uncertainty

ASB, a major New Zealand bank and subsidiary of Commonwealth Bank of Australia, reported a slight 1% decline in its cash net profit after tax for the year ended 30 June 2025, coming in at NZD 1.35 billion. Despite this modest dip, the bank demonstrated robust momentum with home lending rising 7% and business and rural lending increasing by 2%. Customer deposits also grew by 4%, reflecting steady confidence among New Zealanders in ASB’s services.

Chief Executive Vittoria Shortt highlighted the bank’s commitment to simplifying and securing customer experiences, even as global economic uncertainties linger. Lower inflation and easing borrowing costs have provided some relief to households and businesses, while ASB’s exports have remained resilient.

Investing Heavily in Technology and Security

Operating expenses climbed 10% to NZD 1.424 billion, largely driven by strategic investments in technology, regulatory compliance, and cybercrime prevention. ASB spent over NZD 100 million on combating financial crime and fraud, reflecting a proactive stance in safeguarding customers amid rising digital threats. The bank also expanded its workforce by 768 employees to support these initiatives.

ASB continues to champion open banking in New Zealand, partnering with fintech firms to enhance payment security and data sharing. Notably, it was the first bank to support POLi, a leading online payments provider, and has extended fee waivers for fintech partners through December 2026 to encourage innovation and accessibility.

Driving Home Ownership and Housing Supply

The bank’s efforts to accelerate home ownership are evident, with new home loan customers nearly doubling compared to the previous year. ASB supported 12,300 first-home buyers and facilitated over 6,800 customers using KiwiSaver funds toward house deposits. To manage a surge in loan maturities, ASB hired 80 new home loan specialists and streamlined approval processes.

Beyond lending, ASB committed more than NZD 288 million to its Accelerated Housing Fund, targeting the development of nearly 700 new warm, dry, and healthy homes focused on social, affordable, and Māori housing. The bank also supports papakāinga housing projects, underscoring its dedication to community and cultural priorities.

Supporting Business and Sustainability

ASB extended over NZD 2 billion in new business lending since July 2024 and reduced its floating base rate by 2.25%, aiming to stimulate economic growth. The bank introduced innovative products like the 0% ASB Smart Solar Loan, designed to help farmers improve energy security and reduce costs, while boosting regional resilience. Its Every Hectare Matters programme further supports agricultural diversification and sustainability.

Digital banking enhancements continue to improve customer security and convenience, with features such as ASB Caller Check and Confirmation of Payee services helping to combat scams. Nearly 570,000 New Zealanders used ASB’s digital financial wellbeing tools this year, reflecting growing engagement with money management resources.

Looking Ahead

ASB’s 178-year legacy and strong partnerships position it well to navigate ongoing challenges. The bank is actively collaborating with government and industry groups on issues like climate adaptation and insurance data sharing, signaling a forward-looking approach to national priorities.