Exiting BNZ boss Anthony Healy is predicting a flat housing market ahead but believes the bank's home loan book will continue to grow on the back of a shortage of houses in Auckland.

The Australian-owned bank today reported net profit up 2.6 per cent to $937 million on the back of strong lending growth and lower provisions for bad and doubtful debts.

Healy, who next year heads back to parent National Australia Bank, said he had talked a lot about his concerns for affordable housing in the past and the recent slow-down in the Auckland property market had not resolved the issue.

"It has not fixed it. There are still a lot of houses that need to be built."

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But he said the combination of tightened loan to value limits placed on the banks by the Reserve Bank, capital constraints out of China and restrictions on lending to foreign buyers had slowed the market.

"There have been a whole lot of levers pulled."

Angela Mentis was today named as the new chief executive of BNZ and will take over the top job from January. She has been on the board of the BNZ since December 2016.

Outside of Auckland house prices were still rising but Healy said they had a long way to go before there were affordability concerns there.

Auckland house prices had flattened off and he expected them to remain quite flat for a while.

"I don't expect a correction but they will remain quite flat."

Despite the slow-down he expected the bank's home lending to continue to grow in the year ahead.

"There is still strong demand for houses," he said. "It definitely won't be as strong as financial year 2016 but will flatten out a bit."

However he expected to see strong growth on the business lending side as the economy continued to perform.

Healy said the bank's 2017 result was a growth story which was driven off the back of investments made in the business over the last three years.

In particular he pointed to the bank's partnerships business - its business banking arm - where it had seen good market share growth.

"Our unique partners model continues to resonate strongly with our business and agri clients across New Zealand."

Charges for bad and doubtful debts decreased by $54m or 43.2 per cent as a result of improved economic conditions, including the outlook for the dairy portfolio.

Healy said it had been pleasing to see the recovery of the dairy sector which has delivered improving on-farm cash flows.

"We are also seeing the unwinding of the Dairy Impaired No Loss category, which has reduced 73 per cent over financial year 2017, from $823m to $222m.

"This is the result of the effort we made to support our farmers through the downturn and shows the resilience of the sector," he said.

Net interest income at the bank grew by $85m or 5.3 per cent driven by growth in lending and deposit volumes but that was partly offset by a lower net interest margin.

Its net interest margin shrank by 6 basis points to 2.18 per cent on the back of a competitive deposit market.

Gross loans and advances increased by $5 billion or 6.7 per cent to $79.1b driven by housing and business lending. Deposits increased by $4.6b or 9.1 per cent to $55.1b.

BNZ's parent National Australia Bank saw a 2.5 per cent rise in its cash earnings to A$6.6b. The bank made a statutory net profit of A$5.3b for the year to September 30.

Andrew Thorburn, NAB chief executive, said the result represented another year of consistent delivery for the bank.

"Cash earnings and revenue are up, asset quality is a highlight again, and we have further strengthened our balance sheet."

Thorburn said the bank had made strong progress in the past three years and it was now going to accelerate its strategy by increasing its investment by A$1.5b by September 2020 to further improve the experience for its customers, reshape its workforce and grow the bank.

At the same time it would target more than A$1b in savings as its simplified the business.

"We have a clear plan to deliver for our customers. We move forward with confidence and
a purpose to 'back the bold who move Australia forward'."

Australian media reported Thorburn saying that part of the savings would include a cut in 6000 jobs over the next three years, although a further 2000 new jobs would also be created.

NAB employed 33,422 full-time equivalent staff at September 30.

A BNZ spokeswoman it didn't have a specific number of planned job cuts.

"For us it is more of an ongoing transformation."

Last month BNZ restructured staff mainly in its head office with up to 100 people thought to be affected.

The bank employs 4500 permanent full-time staff and 760 permanent part-time staff.

Who is Angela Mentis?

National Australia Bank's head of business banking, Angela Mentis. Photo / News Corp Australia
National Australia Bank's head of business banking, Angela Mentis. Photo / News Corp Australia

The woman who will take over as chief executive of the Bank of New Zealand is a career banker who grew up in Sydney where her Greek-born parent ran dairies and coffee shops.

Angela Mentis was today named as the new chief executive of BNZ and will take over the top job from January.

She has been on the board of the BNZ since December 2016.

According to an article in The Australian in 2015, Mentis wanted to join her family's business but got told by her father to get a good university education instead.

She got a job a Macquarie while still at university and finished her business degree while also working full-time.

After a stint at Macquarie she moved to Citibank and then Westpac. She joined BNZ's parent National Australia Bank in 2006 initially in its private wealth division moving up the ranks before moving into business banking.

She was promoted to head up the business banking division in 2014.

BNZ chief executive Anthony Healy described Mentis as a "terrific person" and a "good friend".

He said she was very focused on customer experience.

Healy said NAB chief executive Andrew Thorburn had called him about moving back to Australia last week to lead the business bank - taking over the position Mentis currently holds.

But Healy admits it was a bit too soon.

"I would have liked to have stayed a bit longer," he said.

Healy has been with the BNZ since 2009 and has been chief executive for only three and half years.

But he said he felt confident he was leaving the company in great shape.

Mentis will be the first female chief executive of the BNZ and may also be paid more than what Healy earned based on previous history.

NAB's 2016 annual report shows Mentis was paid $A2.68m in the year to September 30, 2016 while Healy was paid $A2.38m.

A BNZ spokeswoman said BNZ CEO remuneration package would only be disclosed in the annual report.