Signs a recovery in household demand is underway, following better than expected retail sales.

Seasonally adjusted figures, for the December quarter rose 2.2 percent, up to nearly $18 billion.

A lack of sales in the motor industry dragged the total figure down from just under 3 percent.

ASB economist Daniel Smith says the Rugby World Cup finals boosted figures, but even without that, there are signs a recovery is gaining momentum.

Meanwhile there's a prediction that bank balance sheets will continue to grow as the nation's appetite for credit improves.

ASB has posted a six month net profit after tax figure of $372 million.

Chief executive Barbara Chapman says the main reason for that result is a growing trend to switch from fixed to floating mortgages.

She says the bank can get a higher margin from a floating rate.

Ms Chapman says it's been a time of saving and writing off debt for Kiwis.