Heartland New Zealand has reaffirmed its profit guidance for the full year but says improving confidence is translating only in pockets of improved business performance.
Heartland lifted first-half net profit 56 percent to $16.7 million, partly due to it being able to access cheaper funds as a result of becoming a bank just over a year ago.
Chief executive Jeff Greenslade said his company was not relying on credit growth to improve its profits.
"We're in an environment of low growth in terms of credit growth, so the amount of new lending being generated by the system is very low," he said.
"So I think all the industry is either flat or growing at very low levels."
It was challenging in terms of system growth but Heartland's strategy was to avoid being tied up with system growth by finding new products for acquisitions where they could get better growth, Mr Greenslade said.
Since becoming a bank, Heartland had been able to access cheaper funds and it now had a better product mix, he said.
Asset growth would remain challenging, given increased competition in the business and rural sectors.
Mr Greenslade said that, from his perspective, the economy was not as strong as some people were saying it was.
Earlier this month, Heartland said it was buying Seniors Money International's New Zealand and Australian home equity release mortgage businesses.