Australia & New Zealand Banking Group says its New Zealand division performed strongly in the final three months of last year as cash profit slipped 0.2 per cent.
It maintained market share as lenders fought for mortgage customers and reaped gains from the merger of its National Bank and ANZ brands.
Cash profit, which strips out changes in the value of financial instruments, slipped to $415 million in the October-December quarter from $416 million a year earlier, but net interest income edged up 4 per cent to $717 million.
Statutory net profit gained 8 per cent to $425 million.
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The Melbourne-based bank said its New Zealand unit expanded its balance sheet in the period, with a 5 per cent increase in gross lending and a 7 per cent gain in customer deposits.
The lender showed continued gains from the 2012 merger of its brands and systems.
"In New Zealand our market position is seeing us benefit from the economic upturn supported by further productivity outcomes," said ANZ chief executive Mike Smith.
ANZ's local division lifted annual cash profit 17 per cent to $1.68 billion last year as it cut duplicated costs from the merger programme and benefited from home loan growth.
The Australian bank reported group cash profit of A$1.79 billion ($1.86 billion) in the three months to December 31, compared to A$1.73 billion a year earlier. Statutory net profit was unchanged at A$1.65 billion.
New Zealand retail banking sector reported a 2 per cent decline in cash profit to $125 million, but the commercial division lifted earnings 5 per cent to $192 million.