ASB Bank has posted a bigger half-year profit because of higher customer deposits and improving margins.
The bank, which is owned by Australia's CBA, made $593 million in the six months ended December, up 13 percent on the same time last year.
Customer deposits grew slightly faster than lending, while its net interest margin - in effect the bank's profit margin - rose by one basis point to 2.2 percent.
Incoming chief executive Vittoria Shortt said the interest margin had stabilised after a series of declines.
"This has primarily been driven by improved lending margins, partly offset by the impact of competition for term deposits," she said.
The bank's provisions for bad and doubtful debts reduced by about half because of an improving dairy sector.
Home lending increased by 5 percent, while business, commercial and rural lending was up 8 percent.
Ms Shortt said a rise in customer deposits was pleasing, given a competitive market.
"We are seeing a continued trend around customers focusing on increasing savings and taking advantage of the current low interest rate environment to pay down debt," she said.