Strong lending growth on housing and business helped to boost BNZ's half year profits by nearly 18 per cent compared to the same prior period.

The bank, which is owned by National Australia Bank, reported a net profit of $490 million for the six months to March 31, up from $416m.

Angela Mentis, reporting her first result as BNZ chief executive, said the results illustrated a strong performance for the bank and its customers.

Operating revenue increased by 11.1 per cent to $1.17 billion.

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While the New Zealand segment of NAB reported cashing earnings up 8.6 per cent to $494m with an increase in total revenue of 8.1 per cent to $1.19 billion.

Mentis said revenue growth was supported by strong business and housing lending growth and improved net interest margin.

The bank's gross loans and acceptances increased by 4.7 per cent to $79.8 billion while its deposits increased 9.8 per cent to $58.2 billion

Its net interest margin increased 9 basis points to 2.24 per cent on the back of lower funding costs.

However its credit impairments crept up rising $1 million to $41 million and its operating costs rose 7.4 per cent to $465 million.

Mentis said the results meant the bank was well placed to respond to an unprecedented change in the way customers were using digital technology.

"We are accelerating an ambitious transformation strategy. Our sights are set on the
changes that will make the biggest difference to our ability to consistently offer our customers a seamless banking experience."

The banks says over 92 per cent of its transactions and 49 per cent of sales are now digital.

"Having the right resources in the right places will continue to be an area of focus for us.

"Our half year results include an allowance for costs to support the reshaping of the bank with our focus on becoming faster, more personal and innovating across our digital
platforms," Mentis said.

The result comes as the banks face increasing scrutiny in the wake of Australia's Royal Commission into misconduct in the financial services sector.

New Zealand banks have this week been asked to prove they are not ripping off consumers by local regulators the Financial Markets Authority and the Reserve Bank.

Mentis said it was not complacent about the issues emerging from Australia.

"We will be ruthlessly vigilant in ensuring that our customers' trust in us is well placed."

She said the bank regularly assessed global best practice in relation to conduct and was taking learnings from several recent financial sector inquiries across Australia, the UK and the US.

"The Royal Commission is helping shape this work, but our focus is deliberately broader than that to ensure we are across all relevant findings and learnings."

Parent company National Australia Bank made a net profit of A$2.58 billion for the half.