A new study says New Zealand's main banks are faring reasonably well despite the recession.
That does not appear the case on the face of it, with PriceWaterhouseCoopers saying total profits at ASB, BNZ, Westpac, ANZ and KiwiBank plunged 22% to $1.3 billion in the six months to March, compared with the same period a year ago.
But the consultancy firm says a number of one-off items may be clouding the comparison, including the sale of stakes in credit card company Visa.
Report author and financial services partner at PWC, Sam Shuttleworth, says earnings declined less than 2% when comparing the March half year with the previous six months.
Actual and expected bad debts proved to be the main drag on bank's earnings, with an average quadrupling of impairment costs.
But banks have managed to grow interest income by increasing the cost of loans and hiking break fees.
Sam Shuttleworth says the figures could have been a lot worse but any recovery is likely to be slow.