Heartland Bank wants to raise up to $150 million through a retail bond issue to help fund its growth.

The NZX-listed lender announced a profit rise of 12 per cent to $60.8m this morning for the year to June 30.

It is forecasting its profit to rise again this financial year to between $65m to $68m.

Heartland chief executive Jeff Greenslade said the bank had seen growth across the board in its household, business and rural lending books and he expected that to continue.

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"We see a continuation of the same."

The bank saw a 14 per cent increase in its receivables to $3.6 billion over the year while its net assets increased from $498.3m to $569.6m.

Receivables from its household division which includes motor vehicle loans, personal loans, reverse mortgages and lending via peer to peer platform Harmony grew 14 per cent to $919.1m.

But its net operating income from the household division grew at a lower rate of 8 per cent to $92.9m due to lower earning rates on motor vehicle loans and personal loans as well as a lower lease income due to a smaller lease book.

Greenslade said there was increasing awareness of its reverse mortgages which had seen that part of its business grow by 12 per cent in New Zealand and 19 per cent in Australia to $405.2m and $515.7m.

The bank's business lending division also grew strongly with its receivables up 11 per cent to $995m.

The net operating income from the division was $47.1m - an increase of 10 per cent.

Greenslade said this had been boosted by its strategy to extend its reach through intermediaries alongside growth from its online business loan platform Open for Business.

Greenslade said the company was making traction in its small business lending division.

"We are just getting out to more New Zealanders."

He put that down to greater visibility.

The bank's rural division also saw growth of 22 per cent in its receivables to $675.4m although its net operating income grew at a slower rate of 11 per cent to $29.2m.

Greenslade said the bank hoped to raise between $75m and $150m from retail investors through a bond that would be listed on the NZX debt market.

While the bank's funding and liquidity remained strong with retail deposits growing $291.1m to $2.6b Greenslade said it wanted to reach people that would be outside of its normal deposit base.

"It is about diversity and getting a bigger range of investors."

The five-year term of the bond would also lengthen the term of its funding compared to the average deposit term of 18 months.

Heartland's operating costs were up 2.6 per cent to $71.7m as business growth drove higher staff costs.

Its impaired asset expenses also rose by $1.5m to $15m mainly driven by higher impairments in its household division after higher write-offs in the personal loan and motor vehicle loan books than the previous year.

Its net interest margin fell from 4.5 per cent to 4.46 per cent primarily due to a change in its asset mix.

Greenslade said margin pressure was a common feature across the banking industry and he was pleased that the bank's margin had stayed in the same range.

The bank will pay a dividend of 5.5c per share.

Its shares were up 1c to $1.87 early this afternoon.