The owner of the ANZ and National banks says lending slipped slightly in the final months of 2011, but interest margins improved.
The ANZ Banking Group reported an underlying cash profit of $A1.48 billion in the three months to December.
That's 4.6% more than in the previous quarter and 4.1% more than in the same period a year ago.
Chief executive Mike Smith says the bank's performance has been solid, with good results from New Zealand, Asia Pacific, Europe and America partially offset by continued margin pressure in Australia.
While economic growth remains subdued in New Zealand, Mr Smith says he sees no return to pre-financial crisis credit growth and the bank's business momentum is positive
Lending volumes fell 0.7% in the quarter, while deposits increased 2.4% and margins also rose.
The bank says it is making good progress in moving to a single banking computer system to cover its ANZ and National retail arms. Testing will be carried out later this year.