The bank, which is owned by National Australia Bank, reported operating earnings of $1.38billion for the period, down 11.9% on the $1.57billion reported in the previous corresponding period.
The total operating profit before tax fell 12.4% to $1.26billion from $1.44billion and the reported profit fell 12% to $913million.
The New Zealand banking operations reported cash earnings rising $13million to $813million, with a particularly strong second half driven by solid revenue growth and a lower charge for bad and doubtful debts.
"Our strategy is delivering for the bank, despite a challenging year in a highly competitive banking environment and with higher funding costs affecting margins," BNZ chief executive Anthony Healy said when releasing the financial results.
The reported profit of $913million was lower this year, due to lower trading income in BNZ markets and losses on hedging from both the strengthening New Zealand dollar and interest rate movements, he said.
In New Zealand, the cash earnings rise of $13million was assisted by a lower charge for bad and doubtful debts, reflecting the strength of economic conditions outside the dairy sector.
Mr Healy said the BNZ had retained its market share, thanks to a focus on sustainable growth and its re-entry to the broker market had played a big part in that.
About $1.8billion in home loans were written through brokers in the review period.
During the year, four new broker partners were appointed: Mortgage Express, Global Financial Services, Kepa and Mortgage Link.
"Housing affordability continues to be an issue and as long as migration and supply are key factors, the recent loan-to-value restrictions will only have a short-term effect.
"Like all banks, we anticipate there will be increased pressure on lending margins in the coming months which will influence interest rates."
The bank had worked as a "true partner" to its dairy customers and Mr Healy believed the management of the downturn had been market-leading.
The BNZ managed its risks well and took a prudent approach to dairy lending, making provisioning decisions early.
The outlook could be turning for the positive but while there was still some uncertainty, the bank would retain its prudent approach.
"The challenges of dairy, which makes up about 57% of our agribusiness lending, have been noted. But it’s important to acknowledge many of our other customers in sheep and beef, forestry, kiwi and pip fruit and viticulture have had a strong year."
In Australia, National Australia Bank held its final dividend unchanged at A99c after lifting full-year reported earnings 4.2% to $A6.48billion ($NZ6.92billion).
NAB chief executive Andrew Thorburn said the bank’s capital position meant the lender was comfortable maintaining the same A99c dividend the lender paid out a year ago and at the half-year.
