New Zealand's big four banks' profits have increased at three times the rate of the country's gross domestic profit (GDP) over the past 10 years.

According to the Reserve Bank, ANZ, ASB, BNZ and Westpac made a combined $4.9 billion, after tax, in the year to December 31, 2017.

Ten years earlier, in what was described as a "boom time" for banks, when lending growth soared, they pulled in a combined $2.8b after tax.

That means their profits rose 75 per cent over the decade.

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At the same time, New Zealand's GDP increased 23 per cent.

Claire Matthews, a banking expert at Massey University, said the bigger a bank got, the more money it could be expected to make.

"They continue to put emphasis on trying to trim costs. There's got to be a point they can't go below but it appears they haven't hit that yet."

Banks have laid off staff as they shift to a more digital environment.

SUPPLIED Claire Matthews, Massey University: "They continue to put emphasis on trying to trim costs. There's got to be a point they can't go below but it appears they haven't hit that yet."

Banks were also providing for the potential of an economic downturn that had not occurred, she said.

Other factors helping profitability include the advent of KiwiSaver, which gave the banks profitable funds management business, and low interest rates, which sparked more household borrowing.

Stephen Parry, organiser at First Union, which represents some bank staff, said the banks were not sharing their profit success with workers.

As part of bargaining with one of the big four, the union had worked out that the bank's profit was worth $200,000 per employee.

"Banks could triple the salaries of their staff and still make a healthy profit. You have to ask the question whether the banks are fairly distributing their profits to their workers and we say they are not."

Matthews' colleague, David Tripe, said profits were "currently on the high side".

"There's an element of good luck to that and it's not necessarily a permanent condition."

But customers of banks were better served by them being profitable than if they ran into trouble, he said.

People with loans could find them called in if a bank got into trouble and those with deposits might lose their assets. "You don't want your bank to fail. It's better that they're making a profit than making a loss," he said.

ANDREW GORRIE/STUFF ANZ is on track to be the country's first $2b-a-year bank.

"If you look at ANZ they are probably going to earn $1.6b to $2b this year.

"Someone who is getting $20 an hour will look at that and say 'the banks are getting much more than me I must be getting ripped off'. Banks are some of the biggest businesses in New Zealand but they also pay the largest amount of tax of any New Zealand business."

New Zealand Bankers' Association chief executive Karen Scott-Howman said the industry's return on equity was about 14 per cent. That is roughly the same as The Warehouse Group and well behind Fisher and Paykel Healthcare's 26 per cent.

"It's really important to put any discussion about profits into context.



"Last year banks spent $7.2 billion running their businesses here. That's $5.2b on operations, employing over 25,000 people and buying local goods and services, all while giving back to our communities through sponsorships and volunteering. They also paid $2b in tax."

New competitors in the market have competed more on service than on price.

Matthews said, while it appeared increasing competition wasn't affecting profits, it was hard to determine. Profits could be higher without it, she said.