"We haven't seen anything much in the way of interest rate increases but we have seen some increase in funding costs so we may see an impact on margins."
The banks managed to hold their margins flat in recent years by pulling in more deposits from local investors. But that could change as the cost of borrowing money offshore rises due to rising interest rates globally.
"Overall, the impact on profits is possibly slightly down. But no big surprises," he said.
John Kensington, partner at KPMG, which produces a six-monthly report on the banking sector, said he expected the results to be a little subdued on the back of weaker business confidence.
"I can't think of anything spectacular that will drive it up a long way," he said.
Kensington said New Zealand had been hit by the post-election blues and there was uncertainty over the timing and impact of proposed changes by the new Labour-led Government.
"It is not easier than it was six months ago and it is not harder but it is subdued."
He said provisioning for unpaid loans and advances could tick up slightly but that was more thanks to things being good in previous years.
Andrew Bascand, managing director at Harbour Asset Management, said he expected to see some provisioning from the Australian banking inquiry come through in the half-year results.
ANZ has already said it would take a $A50m ($53.5m) hit in its full financial year because of the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Bascand said lower lending growth combined with a rise in funding costs meant margins were likely to be under pressure.
"Banks are going to say it has been a fairly tough quarter."
He said the Australian banking inquiry would make it hard for the banks to increase mortgage rates out of cycle without a lift in the official cash rate.
"I think it will be very hard for banks to conduct an out of cycle interest rate rise."
He said usually banks would be expected to increase rates by 10 to 15 basis points to cover the increased funding costs which had crept up in recent weeks.
But he expected the quality of the loan books to remain strong as there continued to be low unemployment in New Zealand and Australia.
The banks were also benefiting from there being no sectors under strain, unlike other years in which New Zealand dairy and Australian mining were doing it tough.
Bank results
Net profit for six months to March 31, 2017
ANZ $869m
BNZ $416m
Westpac $462m (cash profit)