Radio New Zealand - Te Reo Irirangi o Aotearoa

Tax deal puts ASB result in the red

Updated at 12:19 pm on 10 February 2010

The settlement of a long-running tax dispute has hit ASB's bottom line - sending its books into the red.

The bank made an after-tax loss of $10 million in the six months to December.

Last month, the Australian-owned bank settled a long-running taxation dispute with the Inland Revenue - agreeing to pay $264 million in tax and interest charges.

If the one-off expense is excluded, ASB made an underlying profit of $199 million dollars - down 16.4% on the same period last year.

ASB chairman Gary Judd says it's a solid underlying profit given the global recession has severely affected banks around the world.

The bank set aside $127 million in the period to cover bad loans - more than double the $60 million put aside in the same period the year prior.

Lending to households, farms and businesses rose by 3% to just over $54 billion during the six month period.

Total deposits increased by 1% to $57.6 billion.

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