ASB half-year profit falls $96m as bank ramps up fraud defence
Wednesday, 14 February 2024
ASB saw its six-month net profit fall $96 million as lending margins slipped, the bank said on Wednesday.
Owned by Commonwealth Bank of Australia, the New Zealand operations, largely made up of ASB, recorded a dip in cash net profit after tax to $672m in the six months to the end of December, down from $768m in the same period last year.
ASB itself delivered a cash net profit after tax of $707m, down from $803m.
The bank saw its lending margins slip, reflecting “increased competition” and an “unfavourable” deposit mix as customers switched their savings into higher-interest term deposits.
Costs also rose as ASB increased its staffing from 5898 full-time equivalent staff members, up from 5929 “to support investment in financial crime, fraud prevention and strategic priorities”, investors were told.
Home lending growth in the 12 months to the end of December was 0.2% at ASB compared to 3% for the wider market, an investor presentation posted on the ASX on Wednesday morning said.
ASB did, however, grow its business lending by 2%, faster than rivals, and retained the title as most popular bank among businesses, although households rate it as only the third best bank. Arrears on loans had worsened at ASB.
The result comes as banks in New Zealand face pressure for having under-invested in anti-fraud technology to protect their customers from scammers.
Parent company Commonwealth Bank of Australia reported a fall in half-year profit, of 8%.
In Australia, Combank announced an “Australian banking first” in February last year with the introduction of its Namecheck technology to give customers an indication of whether the name and account details they entered look right.
The technology has prevented more than 10,000 scam payments which would have totalled in excess of an estimated A$38 million, and already reduced mistaken payments by more than $100m, CBA’s group executive for business banking Mike Vacy-Lyle said in November.
The term used for name and account name matching is confirmation of payee.
Here, ASB has not introduced a scheme similar to that of Combank, but is working with other banks on a longer-term project to introduce “confirmation of payee” technology.
No date has been given for its introduction.
ASB chief executive Vittoria Shortt said: “The global threat of fraud and scams and the exponential growth we’re seeing is a concern for all of us. Within ASB we are laser-focused on this problem and expect to spend almost $100 million this financial year on preventing fraud and scams, financial crime and on cybersecurity, including a team of more than 350 people dedicated to fighting fraud and financial crime.
“From the end of this month, we’ll extend our fraud line to operate 24/7 so customers can contact us any time on 0800 ASB FRAUD with their concerns.”
She said ASB was about to launch a campaign to help raise awareness about fraud and scams.
“Scammers are increasingly targeting victims in all areas of daily life, by text message and email, on social media platforms and dating apps, and on the phone. This is not an issue banks can solve in isolation,” Shortt said.
“Banks and other private sectors like telecommunications and social media, as well as police and other government agencies, and all New Zealanders have a part to play.
“We are taking an active role in helping to drive this cooperative effort. For example the first phase of Anti-Scam Centre collaboration between banks and police launched in December, with new information sharing protocols which are helping to identify and reduce fraudulent payments to mule accounts,” she said.
The Government has so far remained coy about its response to banks’ role in protecting customers from fraud. It has until March 1 to officially respond to the findings of a select committee inquiry into fraud.