Its net loss for the half year narrowed to $1.5 million from $6.5 million in the previous first half.
Chief executive Sam Knowles says the bank continues to meet or beat all its financial and performance targets and that it is on tract to produce a profit in 2004/05 - it lost just over $8 million in the year ended June 30 last year.
The bank is already operating cash-flow positive by $463,000 in the latest six months compared with negataive $5.57 million in the previous first half.
Given the improving trends in the latest two half years, Knowles concedes the bank may even reach break-even point at the end of the current financial year.
"We might. If we weren't starting to invest in growth, we undoubtedly would, but we're currently looking at small business and accelerating growth," he says.
"It's extremely creditable for a greenfields bank to get to break-even in two years." Internationally, greenfields banks usually take about seven or eight years to become profitable, he says.
Other key statistics include a $232 million increase in retail deposits to $697 million, outlet numbers at 290 and customers exceeding 200,000.
Knowles says the result is very encouraging. "There has been sustained growth in our home loan book with good quality mortgages. We have been able to maintain our competitive advantage on rates, particularly in the variable loan market."
The accounts also show that of $959,000 in impaired assets at June 30, $707,000 was recovered in the latest six months and $252,000 was written off. A further $332,000 in past due assets was added in the half year while interest foregone on past due assets was $10,000.
Knowles says these relate to only two loans, the only two which have gone past 30 days due, one which involved fraud.
While Kiwibank's systems are now nearly at the point where it could start dealing with mortgage brokers, it has a couple of issues still to be resolved first.
Given Kiwibank's pricing in relation to the major home lenders, "there's the challenge of us making any money. We would have to find brokers that were prepared to work for lower commissions than they currently do."
The other issue is a need to be satisfied with brokers' integrety and the extent to which their business is volume driven, Knowles says. "We've never said no to mortgage brokers. I'm open to it longer term."
