The bank's loan book, including home loans, business lending and credit cards, increased 3% over the six months ended December 31.
It was up 6% for the year, from $12.1 billion to $12.8 billion.
But in the previous financial year, Kiwibank experienced lending growth of 10%. In the same half the year before, lending grew 5%.
The slowdown comes despite aggressive mortgage rate discounting. Kiwibank has consistently offered some of the lowest short-term fixed interest rates.
Asked whether the bank had hoped for higher levels of lending growth given its competitive stance, spokesman Bruce Thompson said Kiwibank was unconcerned.
“We are comfortable with our level of lending. The other banks have responded aggressively to our rapid growth in market share, which ultimately has been good for home buyers.”
Chief executive Paul Brock acknowledged the home loan market was competitive. “I’m proud that Kiwibank has led the way in these areas.”
Kiwibank this month launched its “lowest-ever” rate, of 4.79% for six months, not restricted to new customers.
Kiwibank’s impaired assets to gross loans and advances ratio improved from 0.67% in June 2012 to 0.43% at December 31, 2012.
Customer deposits now represent 85% of bank funding, up from 80% in the 2011 financial year.
Kiwibank reported an after-tax profit of $58 million for the second half of 2012.
