Strong revenue growth and a bounce back in the economy has boosted the Bank of New Zealand's full-year profit by 74 per cent to a record $1.32 billion.
The year to September 30 result included non-repeat notable items and excluding those its profit was up 12 per cent to $1b.
Dan Huggins, BNZ chief executive, said it had had a successful year driven by a stronger than expected economy.
"For us, for BNZ, when New Zealand and its businesses do well we do well and that is what you have seen in the result."
The bank's revenue or operating earnings were up 13.5 per cent to $2.86b while its operating expenses fell 8.5 per cent to $1.06b.
During the year BNZ also wrote back a credit impairment of $37m from a $300m charge.
Huggins said home lending had been incredibly strong and it had seen solid growth in its housing portfolio off the back of that strength.
The BNZ had helped 17,000 Kiwis to buy homes of which nearly 5000 were first home buyers. It also lent money to 11,764 New Zealanders to renovate and invest in existing properties and supported the development of more than 1600 new home builds.
BNZ's loans and advances grew by 7.5 per cent to $94.7b supported by home loan growth while its deposits and other borrowings increased by 8.8 per cent to $78.1b.
Huggins said the bank had seen a shift over the past six to nine months from investors to more owner occupiers.
"When we look at application volumes that still remains quite strong."
But he said he did not expect to see the same level of house price appreciation that the country had seen in the recent past.
"If you look at house prices over the last decade they have been driven by falling interest rates, population growth and a shortage of housing supply. We don't see those same factors continuing moving forward."
Huggins said businesses had been resilient over the financial year despite Covid lockdowns.
"We have seen many of them pivot their businesses to online to click and collect, some haven't been able to do that, some of them in Auckland still can't operate - hairdressers or hospitality - there is a little bit of a difference depending on who you talk to.
"But many have been able to pivot. Looking forward businesses need certainty, they need the economy to open up and that leads to we need the vaccination rates to get up so that we can open."
Huggins said the Government's signalling that Auckland was likely to open up further from November 29 was a positive shift.
"There will be relief for many, certainly for those that can't open tomorrow, it's going to be a relief that they see a path to being able to open."
He said the bank wasn't seeing losses coming through yet from sectors like hospitality.
"There is a difference in what we are seeing within our balance sheet and profit and loss versus when I speak to customers.
"We are not seeing the losses come through yet, that might happen into next year but we are not seeing it yet and you will see that in the result.
"However when I talk to customers it's tough, people are finding it very challenging, particularly in hospitality as they try and sustain their businesses through this period until they open up again."
Huggins said he had confidence in New Zealand's economy looking into the future but it remained a challenging environment.
"When I look at the economy it's doing well - businesses and households have been resilient but there are certainly challenges we are going to need to navigate - we are coming into a higher interest rate environment, when we talk to customers there are challenges with supply chains with getting access to labour and also there is a transition we are going through to living with Covid as we open up."
BNZ parent National Australia Bank made a net profit of A$6.364b up from A$2.559b. While its cash earnings rose 76.8 per cent to A$6.558b, excluding large notable items it was up 38.6 per cent.
Ross McEwan, NAB chief executive, said the bank's results demonstrated the fact it had navigated a challenging environment well.
The bank lifted its final dividend to A67 cent per share - more than double the A30cps it paid a year ago.
McEwan said the dividend lift reflected its optimism about the future.
"Our bank has momentum, our strategy is clear and as lockdown restrictions ease, a pick-up in activity is expected. While some uncertainties exist in the outlook including the impact of tapering support, our balance sheet settings are strong and we are well positioned for the expected economic rebound in Australia and New Zealand."
McEwan said New Zealand's recovery was well-advanced before recent lockdowns.
"While these have negatively impacted the economy, activity is expected to rebound as restrictions ease."