KiwiBank's annual profit has been more than halved as it scrapped an upgrade of its IT systems and looked for a new way to do more of its business online.
The state-owned bank's net profit for the year ended June was $53 million compared with $124m the year before.
The result was savaged by a $90m write-off of the costs on upgrading its computer systems to expand its online trading presence.
Acting chairman Kevin Malloy said a strategic review of the business had been underway after the Superannuation Fund and ACC joined NZ Post as shareholders.
"We looked at the ... project and asked ourselves is this fit for purpose going forward, is this going to deliver us the digital future and transformation that we want and the tough answer to that was no."
The one-off costs, which also included $4m associated with Kaikōura quake damage, overshadowed a flat performance, where lending grew nearly 7 percent to $17.8bn and deposits rose more than 8 percent to $16bn.
The bank has more than 1,000,000 customers, and has about a 7 percent share of the house loans market. It is the country's fifth-biggest retail bank after the Australian-owned giants.
Leaving aside one-off costs, the bank's underlying profit was fractionally lower, at $122m.
Mr Malloy said the past year had been challenging, with tough competition squeezing profit margins, changes in shareholders, and an issue with the Reserve Bank over the quality of its finances.
"It's been solid but unspectacular, but the bank is in good heart."
Mr Malloy said the bank's priority was to improve its digital trading ability given 40 percent of its business was done online.
The broader Kiwi Group, which includes funds management and insurance businesses as well as the bank, had a profit of $58m compared to the previous year's $131m.