The Bank of New Zealand has lifted its profit, due to higher net interest income and lower bad debts.
Excluding one-offs and non-cash accounting items, the bank made cash earnings of $612 million in the year to September, an increase of 17% compared with the previous year.
Net interest income rose 7% to $1.3 billion, because more people shifted from fixed to higher-margin floating mortgage rates.
Lending was up 2% to $56 billion with people and firms still reluctant to borrow, though BNZ market share rose in housing and agribusiness.
BNZ chief executive Andrew Thorburn says the recovery also means the amount of money set aside to cover potential bad loans has fallen by 19% to $151 million.
Deposits rose 10% to $31 billion.
Separately, National Australia Bank, BNZ's parent, reported a 19% rise in cash profit to $A5.5 billion, boosted by stronger business and personal banking and a drop in bad debts.