Chief executive Paul Brock said Kiwibank may pay the first dividend in its 13-year history in this financial year.
He said the "encouraging" interim result - which reflected the recovery from the Christchurch earthquakes and global financial crisis - pointed to a record full-year performance.
"The underlying strength of the performance was [a result of] improved net interest margin and containment of costs," Brock said. "Margin improvement was driven by favourable funding conditions as lower funding costs provided an offset to lower lending margins resulting from strong competition and customer preference for fixed-term loans."
ASB chief executive Barbara Chapman expressed similar sentiment this month when the Australian-owned bank reported a 7 per cent rise in statutory half-year profit to a record $444 million.
Falling wholesale interest rates are allowing banks to access funding more cheaply.
However, Kiwibank said its net interest margin, which rose 34 basis points to 2.16 per cent in the half-year, could "ease" during the second half as a result of "continued competitive pressures" on both lending and deposit margins.
But if the official cash rate was to remain on hold at 3.5 per cent, as expected, that could reduce or even reverse home loan switching from floating to fixed rates, which would help maintain margins, the bank added.
Kiwibank said it had impaired assets of $30 million at December 31, down from $39 million on the same date a year earlier.
Impaired assets at the end of 2014 were 0.20 per cent of gross loans and advances, below ASB's 0.36 per cent and ANZ's 0.53 per cent, the bank said.
Brock said the bank had 880,000 customers as at December 31, of which 418,000 had most or all of their banking with KiwiBank, representing a market share of 11.6 per cent.
Meanwhile, New Zealand Post's half-year revenue rose to $879 million from $860 million in the previous corresponding period.
In addition to the Kiwibank contribution, the state-run postal company's $100 million interim profit was also aided by the sale of its Australia-based Couriers Please business to Singapore Post for A$95 million.
New Zealand Post's underlying profit, adjusted for non-recurring items, rose 18 per cent to $84 million. The company declared an interim dividend of $2.5 million.
New Zealand Post chief executive Brian Roche said the firm was delivering more parcels than ever before as a result of growth in online shopping and an associated increase in inbound parcels in the lead-up to Christmas.
Letter volumes fell 9.8 per cent.
New Zealand Post will reduce postal deliveries to three days a week from July at the cost of 400 jobs.
