Kiwibank's first half profit is down on flat revenue growth and increased operations and compliance costs.
The New Zealand-owned bank's net profit fell 18 percent to $51 million in the six months to December, compared with the year earlier's $62m.
"As expected the bank faced rising operating costs due to customer growth, accelerated investment in its transformation programme, and increased its risk and compliance investment," Kiwibank chief executive Steve Jurkovich said.
"Investment in standalone branches does mean changes to our extensive network but we continue to maintain the largest retail footprint of any bank in New Zealand, while responding to our customers' clear preference to carry out their day-to-day banking online."
Operating income was up 1 percent to $277m, while expenses rose 13 percent.
He said the bank outperformed the market with $1.1 billion in lending and $1b in deposits.
Loans to businesses rose 17 percent, while home loans rose 4 percent.
Provision for bad debts was little changed at $5m.
Jurkovich said Kiwibank was on track to go cheque-free from the end of the month. (February)
"Since we announced we were going cheque-free nine months ago, we have provided training to thousands of customers through one-on-one and small supportive group sessions at our branches."
New Zealand Post owns 53 percent of Kiwibank and its subsidiaries, with the New Zealand Super Fund holding 25 percent and ACC with 22 percent.
NZ Post reports big increase in profit
The postal service saw a more than four-fold increase in first half net profit of $31m, compared with $7m the year earlier.
NZ Post said the increase was the result of record-breaking parcel volumes around Christmas, with 34m parcels delivered.
Revenue was also up 4.2 percent to $491m, including a $5m drop in revenue from letter delivery.
"The service we delivered for the Local Government Elections in 2019 boosted the number of letters sent, however we must face the reality that New Zealanders are relying less on letters to communicate," NZ Post chief executive David Walsh said, noting there were 23.1m fewer letters delivered in the six-month period.