The state-backed bank also saw a 1.5% increase in loans in the June quarter, in contrast to most of its rivals, which saw a small decline in lending.
ASB recorded a slight increase of 0.09% in the three months, but the other main banks, including ANZ, BNZ, Heartland, SBS, TSB, The Co-operative, and Westpac, all saw lending fall.
The figures will provide encouragement to Kiwibank, which plans to roll out third party lending by the end of the year.
Overall lending remained resilient. Total loans fell by 0.28% in the June quarter, a period which included NZ's level four and three nationwide lockdown.
Total bank profits dropped by $114 million, or 13%, to $776 million.
KPMG said the strong lending numbers were driven by the post-lockdown bounce, and the Reserve Bank's decision to scrap loan-to-value ratio restrictions in April.
The firm's head of banking, John Kensington (pictured), said: "It is worth remembering that June was a bumper month, and lending in July 2020 was actually ahead of July 2019, and the highest July since the Reserve Bank dashboard began recording this data."
The financial services company noted an increase in impairment provisions among the main banks, as lenders identify bad loans. Impaired asset expenses rose by $472.4 million in the three months to June, 5.6 times higher than the 2018-19 quarterly average.
"Banks will need to focus on their credit strategy to adapt to this ‘new reality’ credit environment," the report said.
KPMG warned the real damage from Covid would emerge once the mortgage deferral programme reaches the end of the road. The scheme is due to end in March.
"Loan defaults are still relatively low but we won’t see the true impact unfold until the mortgage deferrals, wage subsidies and various government support packages come to an end.”
The firm said lenders would need to give more consideration to customer vulnerability in the coming months.
It expects strong regulatory oversight as the fallout from the pandemic continues.
"As the initial crisis phase comes to an end, regulators will need to redirect their attention to conduct," KPMG said. "The RBNZ continues to make it very clear that it expects the banks to play a major part in how New Zealand deals with the current economic crisis, making sure vulnerable customers are protected."