Bank of New Zealand's first half profit has fallen 10 percent as it feels the pinch of the weak dairy sector and lower profit margins.
The bank, fully owned by National Australia Bank, made $451 million in the six months ended March compared with last year's $502m.
The cash result, which eliminates valuations movements in financial investments, was $404 million, down 3 percent on a year ago.
Total revenue was about 3 percent lower at $1.13 billion, as a slight gain from its lending operation was more than offset by increased bad debts, especially from dairy farmers, while its other expenses were higher.
Managing director Anthony Healy said BNZ was working with its dairy farmer customers to manage the impact of weak prices on their incomes but it had doubled the amount set aside to cover the level of bad debts in dairy.
The bank was chasing a bigger share of the housing market and was also targeting small and medium businesses for earnings growth.