The country's largest lender, ANZ New Zealand has had a five-fold increase in annual profit, in large part due to a drop in bad debts.
The Australian-owned bank made $867 million in the year to September, compared with $194 million the year before.
The emergence of the economy from recession has bolstered ANZ New Zealand's bottom line, with underlying profits rising 40% to $882 million.
Most of the improvement is due to the lender reducing the amount set aside to cover potential bad loans, which fell 48% to $461 million.
But the tepid recovery means generating more income remains tough, and while margins improved, lending fell slightly to $96 billion as households and firms reduced debt.
The battle among banks to attract income from savers also took its toll, with deposits unchanged at just under $60 billion.
Income from its capital markets arm fell due to reduced market volatility, though its ING wealth management unit did make a stronger contribution.
Overall, the ANZ Group's profit rose by half to $A4.5 billion because of fewer bad debts.
