A dip in banking profits is being put down to increased competition and geopolitical uncertainty.

KPMG's latest Financial Institutions Performance Survey shows combined profits in the banking sector dropped 2.85 percent over the first quarter to $1.2 billion.

Head of banking and finance, John Kensington told Andrew Dickens the cooling housing market has also affected profits.

"The Auckland property market is a big part of where banks lend money, that has slowed down both in terms of the volume and through product transactions going through."

LISTEN ABOVE AS JOHN KENSINGTON SPEAKS WITH ANDREW DICKENS