ANZ New Zealand, the local unit of Australia & New Zealand Banking Group, boosted nine-month earnings 19 per cent as the country's biggest lender benefited from smaller impairment charges on bad debt and cut costs.

Cash earnings, the preferred measure of the Australian-owned banks, rose to $1.38 billion in the nine months ended June 30 from $1.16b a year earlier, the Auckland-based lender said in a statement. That was largely due to impairment charges more than halving to $51 million and an 8 per cent drop in operating costs to $1.09b. The bank's net profit rose a more modest 7 per cent to $1.28b due to a $104m fair value loss on various hedging instruments.

The increased earnings were "due mainly to disciplined cost management and lower charges for credit impairment," ANZ New Zealand said. "Net interest margins have recently stabilised after a period of contraction caused by increased funding costs and a customer preference for fixed home loans."

The Australian group's cash earnings were up 5.9 per cent to A$1.79b for the third quarter, in what chief executive Shayne Elliott said was a period of further progress rebalancing the business to improve returns. Since taking over the Melbourne-based lender, Elliott embarked on restructuring the business to exit less profitable businesses, the latest being ANZ's wealth management division, and introducing more agile working styles to cut down on bureaucratic waste.

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ANZ's New Zealand business lifted mortgage loans 5.5 per cent to $76.26b as at June 30 from a year earlier, while non-housing loans edged up 0.6 per cent to $44.13b. Term deposits rose 20 per cent to $45.72b a year earlier, although ANZ New Zealand continued to tap increasingly more expensive wholesale markets, with total debt issues rising to $19.39b as at June 30 from $16.89b a year earlier.

The bank's dual-listed shares were unchanged at $31.80 on the NZX and have increased 0.4 per cent so far this year.