New mortgage lending by the Bank of New Zealand increased by just $97 million the December quarter, due to a plunge in lending to people with small deposits.
At the same time other mortgage lending surged.
The bank's profit rose 57.1 percent to $198 million in the December quarter, thanks in part to estimated losses halving on bad loans.
New mortgage lending by the BNZ, which is owned by the National Australia Bank, to people with less than a 20 percent deposit shrank by nearly $294m, while its lending to people with larger deposits jumped by $391m.
The bank's commitments to lend to people with small deposits also shrank, by $266 million.
Total new mortgage lending has been sliding for a number of quarters, falling from $170 million in the September quarter of last year, $371 million in the quarter before that, and $455 million in the one before that.