Kiwibank has made a record annual profit - mainly, it says, because people are switching from fixed to more profitable floating mortgage interest rates.
The bank, a subsidiary of state-owned New Zealand Post, made $79.1 million in the year to the end of June - almost four times above last year's result - when it was hit by heavier bad debts arising from the Canterbury earthquakes.
The bank says the improvement is largely due to higher net interest income from people switching from fixed to more profitable floating mortgage interest rates.
Revenue rose 19% to $419 million, but the amount of money set aside to cover potential bad debts rose 4.5% to $91 million.
Customer deposits rose 9% to $11.6 billion,while lending rose 8% to $12.4 billion, driven in part by lower fixed mortgage deals.
Kiwibank chief executive Paul Brock says it is a strong performance despite the fact that it is a relatively flat market.