Bank profits have hit a record high. The four big Australian-owned banks made a combined profit of about $4.5 billion in the 2015 financial year.

Unions say these super profits now appear the norm, and the banks could afford to be more generous, particularly when their top executives are getting paid millions.

Photo: RNZ / Alexander Robertson

The country's biggest banks - BNZ, ANZ, Westpac and ASB - all made record profits this year, as households and firms borrowed more, bad debts fell, and costs remained contained.

Chief executive of ANZ, David Hisco said a growing economy and its sheer size and spread meant the country's biggest bank should continue to do well.

He said the bank did business with about one in two New Zealanders and had a 30 percent market share.

Chief executive of the Bankers' Association, Kirk Hope, admitted banks profits were healthy, but said they were not excessive.

"These profits are based off incredibly large balance sheets; so if you're looking at ANZ with $100 billion in assets, the return on asset is running at about 1.1 to 1.3 percent, if you look at a company like Auckland International airport - its reurn on assets is 4.5 percent."

New Zealand's banks are some of the most profitable lenders in the developed world.

Based on findings by the Bank of International Settlements, returns of 1.1 to 1.3 percent would put New Zealand in similar territory to the most profitable countries; Australia and the United States.

Banking analyst at Massey University David Tripe was not not sure those profits would last.

Dr Tripe said he would be surprised if the sector continued to make significant profit gains.

"We may see some increases in profit if they have significant asset growth, but I wouldn't think that the margins would be inclined to get much wider.

"It's very much a reflection of competition in the market that has been putting pressure on those margins, and I don't see that abating in the short run."

Bank workers would like to see more of the profits come their way.

First Union represents finance staff, and its spokesperson, Maxine Gay, said when banks pay their top executives millions, they can afford to be more generous to those on the front line.

"They are excessive super profits and I think they are completely unnecessary, the size of these profits, I think, provides the evidence that the banks can employ more people, they can afford to be better employers."

Ms Gay said customers were also being ripped off, with bank staff under pressure to persuade already indebted households to get further into hock.