Banks faced global uncertainty and increased funding costs, within a competitive market and during a time of significant bank infrastructure and services investment, he said.
The Government-owned bank reported an after-tax profit of $131million for the period, down 0.8% on the previous corresponding period.
The bulk of the profit came from Kiwibank Banking Group which reported an after-tax profit of $124million.
The New Zealand Post Group reported operating earnings of $197million for the year, down from the $209million reported in the previous year.
NZ Post is the parent company of Kiwibank.
Net earnings for the post group were $141million, down slightly on the $143million in the pcp.
Underlying profit, which many companies are now using to strip out non-core activities, fell to $124million in the period from $128million in the pcp.
Revenue fell by 6.6% to $1.5billion and was matched by a 6.6% reduction of expenditure to $1.33billion.
A dividend of $5million was returned to the Government.
NZ Post chief executive Brian Roche said the profit was largely due to Kiwibank and the proceeds from the sale of NZ Post’s Australian subsidiary, Coverga, to Canon Australia.
"Kiwibank had a good first-half performance. However, this was not matched in the second six months."
A significant milestone had been reached on the Kiwibank transaction announced in April with the New Zealand Superannuation Fund and Accident Compensation Corporation having completed their due diligence, he said.
"We are now actively engaged with the parties to reach a timely conclusion of this transaction."
Earlier this year, New Zealand Post Group received a $495million indicative offer from NZ Super and ACC to buy 25% and 20% respectively of subsidiary Kiwi Group Holdings, which owns Kiwibank.
The indicative offer, which is subject to a number of conditions including due diligence and board and regulatory approval, values KGH at $1.1billion though the final price is still to be determined.
KGH owns Kiwibank and its associated businesses such as Kiwi Wealth Management and Kiwi Insurance.
Referring to NZ Post’s postal services businesses, Mr Roche said letter volumes were set to fall at a rate of about 8% but parcel volumes and revenue were up 6.4% and 2.9% respectively.
Excluding one-offs, the postal services business made a small loss but ongoing investment in processing and delivery technology positioned it well for the future.
NZ Post was now in the investment phase of its business strategy.
It was a leaner organisation positioned for further parcel growth with a renewed focus of putting customer choice at the forefront of decision-making.
Margin growth was difficult in challenging market conditions but there were good parcel trends being seen, Mr Roche said.
Kiwibank now operated more than a million customer accounts, with 419,000 customers identifying Kiwibank as their main financial institution.
Market share in the personal mortgage market had been maintained at 7%, and the business banking team had expanded its presence in the SME sector to 8.4%.
Mr Brock said Kiwi Wealth, New Zealand Home Loans and Kiwi Insurance had all grown their businesses, particularly the Wealth division, which now managed $3.9billion of customer funds and more than 158,000 KiwiSaver accounts.
● Australia Post is back in the black with a full-year profit of $A36million ($NZ37.5million) despite a significant loss from its postal business.
The company bounced back from last year’s $A222million loss thanks to profit from its parcels business rising 8% to $A314million.
A record annual fall of 9.7% in letter volumes led to a $A138million loss for the postal business.
