Kiwibank announced a decline in net profit for the June year, driven by a fall in margins, to $174 million from $191m in 2025.
Retail and business lending grew by $3.1 billion, increasing total lending to $38.9 billion, which the bank said outperformed all the major competitors.
Retail home lending increased by $2.1b.
Deposits increased $2.4b, with total deposits rising to $32.7b.
Kiwibank chief executive Steve Jurkovich said it was another year of growth for the bank, despite a challenging economic environment.
He told the Herald competitive pressure drove net interest margins – what a bank earns from the funds it takes in – down by 15 basis points to 2.10%.
“From December 2025 to the end of the financial year was probably as competitive as I’ve seen in the last at least five years on margins,” he said.
“A couple of the big competitors had slow growth for quite a while and it came to a stage where they felt like getting out and growing again, so we saw the two biggest players push really hard on margin.
“We also had wholesale rates which moved up sharply, and you’re not obviously able to reprice all of that, so you end up a bit pinched, and that’s sort of what happened to us.
“Then the question is, as a bank, do we want to step back and try to protect margin or do we want to do what we’ve been created for, which is to keep growing and try to make the market more competitive.”
Jurkovich said Kiwibank borrowers were paying down their debt about one third faster than the competition.
On the household real estate market, he said sellers were probably waiting for better weather to test the market with their properties because there was still quite a lot of overhang of properties for sale.
Other parts of the economy looked to be doing well.
“Exporting, manufacturing, tourism – where a low NZ dollar is definitely helping – are really recovering nicely.”
Kiwibank took 11% market share in the home loan market, up from 8% last year.
Business banking grew 11% and was about double where it was four years ago.
“That’s a long way faster than what anyone else has been able to do, and, at the end of the day we’re really focusing on that small and medium-sized business because that’s the big engine room that New Zealand needs to be doing better,” he said.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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