The New Zealand banking sector collectively made profits of $1.42 billion in the last quarter, with earnings returning to growth after coming off the boil.
That's according to KPMG's latest financial institution performance survey, which gauged the earnings of New Zealand's banks in the three months to June 30.
KPMG's research say profits were up 14.6 per cent from the first three months of the year when earnings slipped 11.4 per cent.
It attributed the bounceback down to a $48 million lift in interest income, a $77m in non-interest income, and a $116m decrease in impaired asset expense.
"Following a minor setback last quarter, asset quality appears to have recovered, with results showing lower impairment expense and relatively stable provisioning," KPMG said.
"This trend indicates that the downward spike in the previous quarter was likely driven by a variability of results rather than a clear signal of a turning point in the market cycle as speculated. However, given that provision levels have been held at these higher levels, this direction may still be an early indicator of coming change," the professional services firm said.
