ASB Bank, the lender owned by Commonwealth Bank of Australia, had a 15 per cent gain in cash profit, while associated insurer Sovereign had a 40 per cent decline, giving Australia's biggest bank an overall 9 per cent gain in earnings from New Zealand.

CBA's cash net profit from New Zealand rose to $638 million in the year ended June 30, from $588 million a year earlier, the Sydney-based bank said in a statement to the ASX. Total operating income climbed 4.8 per cent to $1.8 billion.

Auckland-based ASB's cash profit rose to $580 million in the latest year, from $504 million, which its parent said was driven by an improved net interest margin and lower loan impairment expense.

Sovereign's cash profit dropped to $52 million from $86 million, as insurance income rose 7 per cent to $274 million. The drop in profit was attributed to "unfavourable actuarial policy liability valuations, including a decrease in New Zealand government bond rates", CBA said.

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Cash net profit is adjusted for fair value movements, one-time items and allocated costs for parent CBA.

At ASB, net interest income rose 10 per cent to $1.2 billion, reflecting customers switching to higher-margin floating rate loans from fixed, with the proportion on floating rates rising to 63 per cent as at June 30, from 59 per cent a year earlier. Home loans outstanding were unchanged at $37 billion.

Other banking income fell 12 per cent to $323 million, including lower trading income, transaction and lending fees.

Customer deposits climbed 4 per cent to $37 billion, which the lender said reflected customer demand for low-risk investments. Business loans rose 4 per cent to $15 billion.

Operating expenses rose 1 per cent to $743 million while impairments for bad loans fell 35 per cent to $47 million.

Total assets in New Zealand rose to $65.6 billion, of which $63.4 billion is in ASB Bank. That's up from $65.4 billion as at June 30 last year. Total liabilities were little changed at $60.2 billion.

Based on ASB's separately released results, its net interest margin widened to 2.16 per cent from 2.01 per cent.

CBA's net income rose 11 per cent to a record A$7.09 billion, just below the A$7.15 billion forecast in a Bloomberg survey of 10 analysts, helped by a drop in loan impairments and increased lending.

Shares of CBA traded at A$55.54 on the ASX yesterday and have climbed 13 per cent this year. The stock is rated a 'hold' based on the consensus of 19 recommendations compiled by Reuters, with a price target of about A$52.08.