ASB made a cash net profit of $742m for the six months to December 31 - an increase of 22 percent.
In a statement released on Wednesday, the bank said the half-yearly result was driven by growth in total lending, up 8 percent compared to the first half of the 2021 financial year. Home lending was up 8 percent, business lending by 10 percent.
Despite the 22 percent rise in profit, ASB CEO Vittoria Shortt, said the bank continued to support its customers through COVID-19, including the Delta outbreak.
After reviewing and streamlining bank fees, Shortt said over the six months to December, fee reductions, rebates and removals of more than $21 million, were provided to ASB customers.
"One of the important changes was the removal of the administration fee across all ASB KiwiSaver accounts in October," Shortt said.
"This led to an additional $3.9 million dollars being invested on behalf of our customers by the end of December 2021 and we expect that benefit to be almost $12 million by the end of FY22."
The bank's business customers, including SMEs, retailers and commercial businesses, received discounted monthly service fees, to the collective value of over $11 million, Shortt said.
Eligible small businesses received relief on contactless debit card transactions. A series of 'Backing Business' workshops helped business owners work through workplace vaccination issues.
The bank made a statutory net profit (NPAT) of $762m, an increase of 23 percent. Its net interest margin increased by 7 basis points, to 219 basis points on a cash basis.
Total loans and advances to customers were up 8 percent, to $102b. Bank deposits were also up 8 percent, to $83b.
Impairment losses on financial assets fell by $43m. The bank's cost-to-income ratio fell 240 basis points, to 35.3 percent. Operating expenses rose by 5 percent.
Shortt said ASB responded to the August 2021 lockdown by reinstating the financial support options made available to customers in 2020. However, there was much less demand.
Compared to 25,000 customers receiving support during previous lockdowns, during the 2021 lockdown, which started in August, less than 3000 personal and business customers took it up.
By the end of December, less than half were still receiving support.
Over the six months to December, nearly 6200 first-home buyers who were bank customers got onto the property ladder.
There were no forced sales of owner-occupied homes.
"While the housing market remains a challenge, our arrears data shows no significant change," Shortt said.
"Our advice for anyone finding it tough is to start talking to us early so that we can work together on a positive pathway forward."
ASB also said it had used the Reserve Bank funding for lending programme, effectively a cheap funding source for banks to use, for over $4b in loans.