Co-operative Bank has posted a decline in annual profit mainly due to one-off costs of becoming a bank and changing its name.
The Wellington-based bank, formerly PSIS, made a profit of $5.7 million for the year to March, a decrease of 20% compared with the previous year.
Deposits rose 4% to $1.2 billion while lending increased 3.5% to $1.2 billion.
Chairman Steven Fyfe says the banking market has been subdued, while it also had to deal with registering as a bank and rebranding itself.
He says the bank will now step up its efforts to attract customers from its bigger, Australian-owned rivals.
Mr Fyfe believes more New Zealanders will choose to bank with Co-operative Bank as its brand becomes better known.
He says co-operative banks have performed very well around the world in the last few years and Co-operative Bank's members elect its directors and any surplus profits are shared with members.
Total reserves increased 4.5% to $129 million and the bank's capital adequacy ratio stands at 17.5% - well above the regulatory minimum of 8%.
Meanwhile, the bank has named former Westpac banker Bruce McLachlan as its new chief executive.
Mr McLachlan spent 10 years at Westpac and was acting chief executive for a short time. His appointment is subject to Reserve Bank approval.