The big four bank posted a 39% increase in statutory net profit after tax in the year to June 30.
ASB's profits were fuelled by a 10% increase in total lending. Home lending jumped by 12%, helped by a "buoyant property market", as the bank supported more than 15,000 first home buyers over the period.
Business lending rose by 9% compared to the prior year, while operating expenses grew by 5%. Loan impairments decreased by $311 million.
ASB chief executive Vittoria Shortt said the pandemic was far from over, despite the positive figures.
"A decisive response from government and our banking system supported Kiwi businesses and households to be resilient during the pandemic. While a balanced recovery is still a significant way off, ASB is in a strong position to keep supporting Kiwis as we work together towards a productive and sustainable New Zealand."
ASB's net interest margin improved by six basis points over the year, driven by "stable funding costs and changes in ASB's deposits and lending portfolios, with increased preference for fixed term loans and at call accounts in the low interest rate environment", the bank said.
The bank hailed its decision to limit investor lending over the year, and said it would continue to support first home buyers.
"We continue to offer low home loan rates and have taken a responsible approach to LVR settings."
The lender said its Back My Build 1.79% mortgage rate had been a hit with borrowers.
"Demand for Back My Build has significantly exceeded expectations – in just over a month, we received applications to support the construction of around 3,000 new homes," Shortt added.
