ANZ bank says an increase in lending and cost cutting are behind a 15 per cent increase in its annual profit.

The country's largest bank made a net profit of $1.78 billion in the year to September 30 - up from $1.54b in the prior year.

Chief executive David Hisco said the bank's solid performance was down to lending growth and ongoing cost management.

"Our expenses decreased 8 per cent in finance year 2017 and are below our 2010 levels, while we've maintained high customer satisfaction."

Hisco said the result was also buoyed by a lower than normal provision charge. The bank's credit impairment charge dropped from $149 million in 2016 to $59m in 2017.

"The strength in some parts of the economy also meant fewer bad loans to contend with and a more benign credit environment saw the provision charge trend lower."

Lower levels of credit losses reflected improvement in credit quality in its retail, commercial and agri portfolios which were partially offset by new provisions.

The bank's gross loans rose 4 per cent.

Hisco said one of the highlights of the year was 6 per cent growth in deposits while its KiwiSaver business also continued to grow with it now having 735,000 members with over $11 billion invested.

The bank's revenue increased 7 per cent to $4.08b with net interest income rising 2 per cent to $3.08b and other operating income up 26 per cent to $999m.

Hisco said the bank's net interest margin stabilised in the second half of its 2017 financial year after a period of contraction caused by increased funding costs and a switch by customers to fixed rate home loans.

The bank continued its technology drive over the year and was the first to launch Apple Pay into New Zealand a year ago.

Hisco said almost of half of its eligible customers had set up the ability to use the technology which allows people to pay using their iPhone or watch, which was an "impressive uptake" of new technology.

ANZ's Australian parent company made a net profit of $A6.41b which was a 12 per cent increase on the prior financial year.

ANZ New Zealand annual result
year to September 30 2016 2017 
net profit $1.54b $1.78b