Advisers wrote 63% of Westpac's new mortgages in latest year

That was up from 60% in the previous year and the upward trend “is very similar to the trend in many banking markets,” McGrath said.

“Competition is fierce and having someone who consumers see as independent and acting on their behalf, it makes sence. Advisers can have a really key role to play.”

Westpac's net new mortgage lending in the second half slowed to $505 million from $1.44 billion in the first half, but McGrath said that reflected competition rather than any pullback from Westpac.

“We continue to compete hard. We don't always win. It certainly reinforces to me that competition is alive and well.”

However, Westpac's net interest margin (NIM) fell three basis points to 2.09% in the first half but ended at 2.17% in the second half.

“The way I look at our NIM year-on-year, compared to the rest of the market our's is the lowest of the big five and behind Kiwibank,” McGrath said.

For the year ended June 30, Kiwibank reported its NIM fell 10 basis points to 2.38%  

In the past, McGrath has explained Westpac's lower NIM as reflective of its different mix of business to the other three major banks.

She acknowledged that is still the case, with the other three having larger business lending books, but said “I'm thoughtful as to why it's below Kiwibank's [NIM].”

She agreed that Westpac's return on equity (ROE) is higher than Kiwibank's.

Reserve Bank data showed Westpac's ROE in the June quarter was 11.4% while Kiwibank's was 7.5%.

McGrath said Westpac has focused on the funding side of the business and completed its first ever sale of perpetual preference shares in the latest year.

The bank sold $375 million of perpetual preference shares on Sept 13 with the interest rate fixed at 7.1% until Sept 13, 2029, which are now quoted on NZX's debt market.

The preference shares qualify as tier 1 capital under RBNZ rules.

Westpac is currently offering 4.3% interest on five-year term deposits.

Its term deposits grew by about $800 million to $79.7 billion in the latest year, slower than its lending growth, causing its deposit-to-loan ratio to drop 2.3 percentage points to 78.1%.

The bank's net profit for the year ended September was up 15.8% to $1.23 billion, aided by a 7% increase in net interest income and charges against profit for bad debts falling to $27 million from $135 million in the year-earler result.