Bank of New Zealand says falling bad debts and mortgage holders switching to floating mortgages boosted profits, as the bank reported a significant jump in first half earnings.
The bank this morning reported cash earnings of $385 million for the six months to March 31, a 36 per cent increase over the same period a year earlier, and 17 per cent higher than the six months to September 30.
Most of the increase came from a sharp drop in the bank's provision for bad or doubtful debts. BNZ took provisions of $34m in the six months to March 31, down from $95m a year ago.
"This is an excellent result for the bank in a slow economic environment and is testament to our strength," chief executive Andrew Thorburn said in a statement.
"It's this strength that allows BNZ to continue to be a bank that will help the local economy as we face into the challenging times that are ahead.
"BNZ has delivered this solid half year performance based on good revenue and deposit growth, improvement in net interest income, disciplined management of costs and a pleasing reduction in bad and doubtful debts."