The Bank of New Zealand has reported a record annual profit of $1 billion.
The profit is up more than 20 percent on a year ago and was driven by higher income from lending and financial market dealings, while its expenses were lower.
BNZ's move to the $1 billion profit club comes from a 7 percent lift in income from its normal lending activities, with growth in deposits rising faster than the growth in lending, although BNZ's market share of deposits has fallen to around 17 percent.
The bank also made hefty gains from dealing in financial derivatives which it uses to cope with swings in currency and other financial markets, while its margins on lending and assets were stronger.
BNZ's provision for bad debts was up more than 50 percent on a year ago, to $128 million which it said reflected the tougher economic environment, particularly in the dairy sector.
Chief executive Anthony Healy said the result showed BNZ's underlying strength at a testing and competitive time.
BNZ's parent - National Australia Bank - reported a full-year profit of $A6.3 billion.