An increase in lending, and a lift in margins has helped lift ASB Bank's annual profit to a record.
The bank, which is the country's third biggest retail bank and is owned by Australia's CBA, had a record net profit of $1.18 billion for the June year compared with $1.06b the year before.
ASB's chief executive, Vittoria Shortt, said the strength of the result reflected the broad economy.
"It's clear that New Zealand's sound economic fundamentals have contributed to a positive operating environment. Unemployment is at low levels, the quality of trade remains high and the housing market is resilient."
Lending was up 6 percent while deposits rose 7 percent, and income from its investment funds and Kiwisaver business grew 18 percent.
Overall the bank's income grew faster than its expenses, and its interest margins, a broad yardstick of its profitability, were higher.
The bank's bad and doubtful debts were $80 million compared with $69m last year, because of higher consumer finance defaults.
"We have continued to support our rural customers through a difficult period and are pleased to see an improvement flowing through to lower provision levels," Ms Shortt said.
She said ASB was investing more in digital technology to allow consumers to manage their own investments and finances directly.