Vittoria Short: ASB CEO on the bank reporting profit drop to $1.3 billion for the year

ASB's settlement over alleged historic breaches of credit disclosure rules has affected its bottom line.

The bank reached a $135.6-million-dollar settlement in October last year.

In annual results released today, ASB's reporting a six-percent rise in operating income, but a 16 percent rise in operating expenses.

CEO Vittoria Short says inflation and new investments in technology also added to the profit drop. 

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Episode Transcript

Speaker 1 (00:00):
Now it's steady as she goes for ASB Bank has
reported a net profit after tax cash profit after tax
of one point three billion dollars for the year to
June thirtieth. That's down two percent on the year before.
Victoria Short is the ASB chief executive. Hi Vittoria, Hey there, Heather,
that drop is that largely down to the cost of
the class action.

Speaker 2 (00:18):
So the drop is largely down to a threatning personally inflation,
you know banks, not only intation. It's been a lot
of it, including on technology. We've also had a very
big investment in technology that's driving our expenses up. And
then yes, we've had the class action.

Speaker 1 (00:36):
Yeah, So apart from obviously what you've just mentioned, does
business otherwise much of the same as it has been,
like just tacking along nicely.

Speaker 2 (00:43):
We're being really pleased actually that more customer the choosing
asp So we have grown at or above the market
across every single part of our business. That's loans, that's
business lending, deposits and.

Speaker 1 (00:56):
Also key reaver what do you put that down to.

Speaker 2 (01:01):
We've been working really hard to make sure that we
are being consistent and that we're finding ways to support
our customers. And just as a quick example, the cost
to provide home loan to say a one one year
home loan because of the Middle East solatility, that cost
increased by eighty three basis points for homelans. We've only
passed on path of that to our customers.

Speaker 1 (01:24):
Is this testament to shock absorber?

Speaker 2 (01:26):
Yes?

Speaker 1 (01:26):
Is this testament to the fact that there is actually
quite a fair bit of competition in the banking sector.

Speaker 2 (01:31):
There's a ton of competition in the banking sector, and
there's more and more competitors coming and all the time.
So you know, we've really got at the top of
the game. Ok.

Speaker 1 (01:40):
You know you've talked a little bit about streamlining as
begin modernizing the business. What do you mean by that?

Speaker 2 (01:45):
So we've been really investing in technology and new processes,
bringing different skills and people into our business. A couple
of like really quick examples. Our new contact center in
Conjunction Worth AI that we've put in the contact center
means that we're reduced the turnaround times by forty percent

(02:08):
of the core wait times. So that's just a really
good example of new system AI people all contributing to
make it our customers to reta.

Speaker 1 (02:18):
Now it won't have escaped your attention. I'm sure this
week that the National Party hasn't made it clear that
they're looking at a banking tax next term. What do
you make of that?

Speaker 2 (02:27):
Yes, but the banking tax is out for consultation, so
we just got that this week and the team will
be going through and having a look at it.

Speaker 1 (02:33):
I think we're talking about two different things. That's the
prudential levy that you're talking about, isn't Yeah, yeah, yeah,
So they're talking about another tax on top of that.
How would you feel about that?

Speaker 2 (02:45):
I think the banks pay their full tax. We're really
big at tax payers in New Zealand. We pay our
full tax. We're very big employers and we support the
economy through supporting a lot of New Zealand suppliers. I
think you know as where really participates fully in the
New Zealand country.

Speaker 1 (03:05):
All right, now, listen to the economic recovery. How's it
looking to you? Has it already started?

Speaker 2 (03:09):
Look, the economic recovery has been stopped start and the
biggest thing is it's been uneven. It's uneven across regions,
it's uneven across sectors. Things that we are really closely
watching for though, is business confidence we can see in
our pipeline that businesses are getting ready to invest more
or bring on more in terms of employment, but not

(03:31):
just yet. So we're watching petical prices, we're watching net
migration for that strengthening, and we know that from what
we can see, there's a lot of rebilience in our businesses.
So interesting that there is year on year households and
businesses and difficulty has dropped by twenty five percent, so

(03:53):
we're definitely seeing improvements.

Speaker 1 (03:55):
All right, Vactoria, as always, it's lovely to talk to you.
I really appreciate your time. That's Victoriassured, the ASB Chief executive.
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