ANZ New Zealand grew its net profit after tax by 21% in the year to September to a record $2.53 billion.

The country’s largest bank attributed much of the jump to the hedging it did to manage its interest rate and foreign exchange risk.

It reported a $163 million gain from its economic hedges – a turnaround from the $196m loss suffered in 2024.

The impact of hedging was also notable in BNZ’s result, announced last week.

ANZ NZ grew its lending by 4% and its deposits by 5% over the year, in what it described as a “strongly competitive market”. This saw its net interest income rise by 4% to $2.28b.

The bank’s net interest margin rose by 3 basis points to 2.60%.

Like the other banks, ANZ NZ noted an improvement in bad debts as interest rates fell over the year.

It said that in the past three months, nearly a quarter of those refixing their home loans at lower rates have kept or increased repayments, meaning they’ll pay off their home loans faster.

More than 40% of home loan customers are now ahead on payments by six months or more, and more than 45% have savings buffers of $5000 or more. Farms in strong agricultural sectors are also paying down debt and building resilience.

ANZ NZ chief executive Antonia Watson said: “It has taken New Zealand longer than hoped to recover from the post-Covid rebalancing, but there are now signs the nation’s economy is finally picking up.

“Global uncertainty hasn’t helped but we expect lower inflation and falling interest rates to flow through and boost the recovery as we head into the new year.

“Confidence is returning, particularly in regional areas. However, Auckland and Wellington, because of the mix of their economies, will take longer to feel the improvement.”

With households and businesses strengthening their balance sheets, house prices stabilising and interest rates significantly lower, Watson said the stage was set for a “cyclical recovery to complement New Zealand’s strong agriculture sector performance”.

“If we don’t have any significant events, we expect the economy – driven by rural New Zealand – to be heading back to pre-Covid levels late in 2026, with the uplift, when it comes, likely to be broad-based,” Watson said.

Jenée Tibshraeny is the Herald’s Wellington Business Editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.