The bank’s net interest margin has risen 9 basis points over the past year. It now sits at 2.39%.

BNZ's cash earnings rose 21 per cent to $741 million in the full year to September. On an underlying basis, its profit was up 8.8%.

BNZ home loan lending is worth $28 billion and while chief executive Andrew Thorburn said the bank’s market share remained flat, at 16.1%, it was growing with the market.

“As the housing lending market grows, our share follows. It increased 2% over the year.”

He said the bank’s mortgage lending book had grown by about $1 billion over the past 12 months. “We also have a significant market share in business lending.”

Bad or doubtful debts had dropped by a third over the year.

Thorburn said the interest margin was important because it was a big source of the bank’s ability to invest.  It fell after the global financial crisis but had returned to a sustainable level.

It had been suggested by commentators that disgruntled National Bank customers might move to BNZ but Thorburn said his bank did not target any particular clients and would not speculate on how many had made the switch.

“We’re focusing on our own game plan, wanting to pick up quality clients, wherever they come from.”

Retail deposits rose more than 10% to $34.5 billion, with the bank's market share of deposits increasing to 18.8 per cent.

Thorburn said deposit funding was important for banks operating in New Zealand and reduced reliance on overseas funding. He said competition in the sector pushed costs up but the competition for home loan clients maintained downwards pressure on mortgage rates.

BNZ's big return comes a week after the country's largest bank, ANZ, reported a record full-year profit of $1.27 billion, up 17%. That followed ASB's full-year profit of $658 million, up by 11%.