TSB says it has been able to grow its market share for deposits and lending, despite an extremely competitive banking environment.
The Taranaki-based bank made $39.8 million in the year to the end of March, down 22% on the previous year, as income expenses rose.
Deposits grew by 10% to a record $4.4 billion and its loan book increased by $219 million to $2.6 billion.
Chief executive Kevin Murphy, says TSB lifted underlying profit by 1.5%, despite the challenging climate.
The bank opened two more branches in the last year and plans to further expand its footprint in the coming years.
The bank set aside $3.3 million to cover bad loans during the year - down more than a quarter on the previous year.