ANZ New Zealand has reported a net profit after tax of $1.825 billion down 8 per cent on last year's record profit of nearly $2 billion.

It's cash net profit was up 2 per cent to $1.933 billion for the year to September 30 on the back of the sale of its One Path Life insurance business to Cigna and the sale of its 25 per cent stake in Paymark.

Acting chief executive Antonia Watson said the result reflected a solid underlying financial performance in what had been a challenging year for ANZ New Zealand reputationally.

"While reviews by the FMA and RBNZ concluded the widespread misconduct issues in Australia were not found in New Zealand they helped us take stock of where we are today, what we're doing well and what we could do better for our customers, and we're making changes," she said.

"Beyond those reviews we have faced our own challenges."

Last year, the bank made a record profit of $1.986 billion for the year to September 30 - just shy of $2 billion.

It's been a difficult year for the country's largest bank first falling foul of the regulator over its capital calculations and then the controversial departure of its former long-standing chief executive David Hisco over issues with his expenses.

Hisco left his $3 million plus a year job in mid-June following an investigation which alleged he "mis-characterised" certain personal expenses as business expenses including wine storage and the use of chauffeur-driven cars.

He had already been on leave due to ill health. But then the scandal worsened after it was revealed the bank had sold a luxury property to Hisco's wife for what appeared to be a below value price.

The sale of 269 St Heliers Bay Rd property, owned by ANZ subsidiary Arawata Assets Limited, to Deborah Veronica Walsh raised fresh questions about the nature of his employment deal and sudden departure.

A Terranet Summary Report shows that the luxury St Heliers mansion was purchased by Arawata Assets, in 2011 for $7.5 million.

Despite a booming property market over the next six years, the property was on-sold to Walsh in July 2017 for just $6.9m.

An investigation by the Financial Markets Authority then found the property sale should have been disclosed as a related party transaction in the bank's 2017 financial statements.

But ANZ disagreed with the FMA's finding.

In a statement, it maintained the "sale price of $6.9m was determined following a process to ascertain the value of the property with reference to external, independent valuations".

It considers the transaction not to be material information on the basis that this disclosure could not influence the economic decisions of the users of financial statements.

The ANZ has also been under pressure ahead of pending changes to increase bank capital requirements proposed by the Reserve Bank of New Zealand.

In submissions to the proposals, ANZ Group chief executive Shayne Elliot threatened to review the "size, nature and operations" of the New Zealand business if the Reserve Bank implemented its proposed changes to capital ratios.

The capital changes would see ANZ Group reduce investment and reallocate resources away from New Zealand to more profitable businesses, Elliott said.

The capital changes are due to be announced in early December.

The bank's net interest income rose 2 per cent to $3.23 billion while its operating income rose 3 per cent to $4.33b.

ANZ's operating expenses also rose 5 per cent to $1.59b which was put down to remediation and increased regulatory requirements.

While underlying revenue growth had been subdued, customer deposits rose 3 per cent to $90b while gross lending rose 4 per cent to $126b, Watson said.

Strong competition in the home lending market combined with official cash rate cuts also saw interest rates drop to the lowest levels on record.

The bank's net interest margin was squeezed to 2.35 per cent down from 2.41 per cent a year in the second half of its 2018 financial year.

Its Kiwisaver funds under management increased 14 per cent to $14.8 billion.

Watson said the New Zealand economy, while growing at a slower pace, was fundamentally in good shape which is promising for businesses moving into 2020.

"Demand for commodity exports is healthy, construction activity is firm, plus lower interest rates and an easing NZD are supporting activity. Growth is expected to start lifting as easier monetary conditions make an impact."