11% drop in ASB Bank's profits, as the bank reported a $238m operating profit for the six months to December 2008.

The drop further includes a $41 million that also includes loss that grew from applying new global accounting rules.

In 2007 the profits during the same period were $267 million.

ASB chairman Gary Judd said, "Total bank assets increased by 16.3 per cent, with lending balances rising 8.6 per cent."

A 16 per cent fall in cash profits was reported this morning by ASB's parent company, the Commonwealth Bank of Australia, which also warned that it might have to cut future dividend payouts.

In 16 years, it's the first time it has not raised its dividend.

Judd said, "Robust competition placing intense downward pressure on margins meant that ASB's net interest margin had fallen during the six months to 1.5 per cent, down from 1.8 per cent in the December 2007 half year."