New Zealand's major banks are expected to report solid annual profits over the coming weeks but analysts will be watching out for signs of the impact from the slowing Auckland housing market.
ANZ - New Zealand's largest bank - will be the first to report its full year to September 30 result on Thursday with BNZ expected to follow on November 2 and Westpac on November 6.
ASB, which runs on a June 30 financial year, reported a net profit of $1.069 billion in August - an increase of 17 per cent on the prior year and its seventh consecutive year of record profits.
David Tripe, a banking expert at Massey University, said overall pressure on profits had been generally downwards in the past few years.
"...and I don't expect that to suddenly turn around."
ANZ, BNZ and Westpac all saw a drop in statutory net profits between 2015 and 2016 after 2015, a particularly strong year for the banks.
Tripe said he still expected ANZ's profit to be well over $1 billion.
But he said the big question was around how much bad and doubtful debt the banks wrote back.
Banks make provisions should borrowers get behind or fail to pay back their loans and writebacks happen when they put more aside than they need to.
A tough time for the dairy sector in recent years had resulted in banks putting aside provisioning for loan defaults in the sector but Tripe said there had been writebacks for the dairy sector in recent times with defaults not as bad as expected.
But the slowdown in the Auckland housing market could mean more defaults come from mortgage lending in the future as over-leveraged borrowers struggle to meet their repayments.
Tripe said whether the Auckland property slowdown was having any impact yet would depend on how the banks' loan portfolios looked.
"It is very hard to predict."
But he expected loan growth to slow.
"I think we will see growth in lending but it won't be spectacular."
Real estate firms and mortgage brokers have pointed to a growing reluctance by banks to lend in the wake of tightening lending restrictions.
In recent years there has also been a mismatch between loans and deposits with much greater demand from borrowers.
Tripe said the pressure on that gap to widen would be mitigated with slower loan growth.
He expected net interest income to be up a little bit up on last year as borrowers continued to switch from floating loans to fixed mortgages.
Shane Solly, a fund manager at Harbour Asset Management, said he would be looking to see how the banks were managing their risks.
Solly said the New Zealand arms of the Australian majors had been very profitable in the last few years.
"We would expect them to come out with pretty strong results."
But one area which could be showing pressure was property development lending, with slowing in activity in the sector.
He also expected the banks to feel the impact from a tightening regulatory framework in Australia.
Figures from KPMG's Financial Institutions Performance survey released earlier this month showed net profits across the banks fell 1 per cent to $1.19 billion in the three months to June 30 - down from $1.2b in the March quarter.
John Kensington, KPMG's head of banking and finance, said at the time that the main driver for the dip was an increase in operating expenses, which rose 14 per cent, or $165.5 million, over the quarter to $1.35b.
That was partly offset by an increase in net interest income, which rose by 3.32 per cent, or $165.46m, and an increase in non-interest income, which was up by 6.3 per cent, or $42.8m.
Net profit year to September 30, 2016 year to September 2015 change:
• ANZ $1.54b $1.77b down 13 per cent
• BNZ $913m $1.038b down 12 per cent
• Westpac $851m $908m down 6.2 per cent