“It’s a pretty credible result really,” he says of the improvement of the group’s brands ASB, BankDirect and Sovereign.
“In terms of new money, money advanced every month, we as a group would be picking up somewhere between 23-25% of new business growth in New Zealand. That is pretty heartening.”
In the fixed rate lending side of the business, Burrett emphasises customer loyalty and the service the group provides.
“We have hundreds of millions of fixed rate lending rolling off each month. We have to keep in touch in touch with clients and customers and make sure that we retain that business as well.
“Our retention rates are well into 90%, which is pretty high. Overall, the book is going well,” he says.
Distribution by branch, broker, mobile, call centre and internet through the three arms of the group allowed the different brands to appeal to different people.
“We have a broad offering and do support the brokers as well, whereas other people don’t.
The bank’s interest rate margin declined to 1.95% in the six months from 2.19% a year earlier. This was due to both the extremely competitive banking environment and the impact of New Zealand International Financial Reporting Standards, under which loan origination costs and fee income are amortised over the life of the loans.
ASB Bank posted a 19% increase in after tax profit of $217 million for the six months.
