More market share in deposits and loans helped drive the 41% rise in net profit at Westpac over the last year.
The bank has revealed net profit for the year to September rose 41% or $132 million to $454 million.
Revenue rose 10% to $884 million, or $674 for each of its 1.26 million customers.
Chief executive George Frazis said the balance sheet was buoyed as the bank outperformed the market in deposit and loan growth.
Home lending growth of 2.4% was more than double that of the overall market and business lending grew by 2.5% in a market that shrunk by 0.1%.
The competitive retail deposits segment grew 10% against market growth of 7.8%, improving the bank’s deposit to loan ratio from 60% 6o 64%.
Bad debt charges fell $111 million or 32% to $236m for the year, helped by ongoing improvements in the economy.
Westpac’s Australian parent bank joins other major transtasman banks Commonwealth Bank and National Australia Bank in reporting profit increases, with net profit rising 10% to $A6.9 billion ($NZ9.08 billion)
The cost of natural disasters in both countries during the first half of the year was about $A100 million, the bank said.
Speaking more broadly about the economy, Mr Frazis said it was a “bumpy ride” ahead as international events beyond New Zealand’s control had the potential to disrupt the recovery.
Westpac forecast GDP growth of 3.7% for the next year as employment levels improved.
“New Zealand is in a fortunate position, with a successful World Cup leading into sound GDP growth forecast for 2012.”
Westpac group chief executive Gail Kelly said Westpac had not been directly affected by European sovereign debt issues and direct exposure to Europe (including the UK) was very small.
Nevertheless, Westpac was not insulated from the flow-on consequences of issues in Europe, which include increased volatility in financial markets, a reduction in the risk appetite of investors globally and materially higher
wholesale funding costs, she said.