At first glance, retail bank profits for the June quarter appeared to be down.
But, once non-recurring items from the previous quarter were removed, profits across the sector rose again.
Overall reported profit for the sector in June was $1.125 billion. The one-off insurance settlement ANZ recorded in the March 2014 quarter of $91 million distorted the underlying results.
The ''normalised'' result was a 6.2% increase in profits in the current quarter, Mr Kensington said.
''This demonstrates the volatility around the bank results and the multi-faceted make-up of the base profit number.''
However, First Union retail and finance secretary Maxine Gay asked yesterday if bank profits were so rosy, why was ANZ attempting to casualise its workforce?
A national strike ballot was being voted on by members of the union at ANZ and some branches had already begun local strike action.
''ANZ wants to reduce security so workers would only know from one month to the next which days and start and finish times they are working.''
In response, ANZ workers had been prepared to allow up to 20% of the workforce to be flexible but that was not good enough for the bank, she said.
Total banking sector assets for the June quarter climbed to an all-time high of $390 billion, an 0.83% increase from March and a yearly increase of 2.4%.
Competition continued to be intense during the quarter, with more varied giveaways for residential mortgage borrowers, Mr Kensington said when releasing the FIPS June analysis of bank profits.
Strong easing on the deposit side of the balance sheet meant the money to fund mortgage lending was more readily available and cheaper.
The Reserve Bank reaffirmed the official cash rate was on hold at 3.5% and signalled a slowdown in the rate of future rises, allowing mortgage fixing to come back into vogue, he said.
House sale volumes were down, with the shift to fixed mortgage rates more than double that of residential floating mortgages during the June 2104 quarter. Fixed-rate mortgages accounted for about 70% of all lending.
''Against this slowing in volumes, we still continue to see reporting of record and sustained house price increases in some markets - notably Auckland - which points to the ongoing supply and demand issue in the market.
''This quarter shows the banks do continue to face and manage well the many economic challenges ahead.''
The rural sector was coming to terms with the fact the $8.65 payout in 2013-14 was like a big night out - the day after, the sector was a bit groggy, a bit headachy and wondering how it had spent so much the night before, Mr Kensington said.
The commercial sector had been waiting for the outcome of Saturday's election.
The New Zealand economy had lost some momentum since talk of the ''rock star economy'' at the start of the year but economic activity grew 0.7% in the June quarter.
''Overall, New Zealand's rock-star economy's latest album is a bit of a concept album rather than a blockbuster hit maker - showing a different side to the economy as some different vibes in the form of potential head winds come to light.''
The next two quarters would be interesting to watch, as an election result could affect general confidence, he said.
