ANZ National Bank is facing hard times by bad lending in New Zealand, and is featuring in the ANZ's financial results but is not at a loss, despite the unstable financial markets.

ANZ National, nevertheless, said that it employs 9000 people in New Zealand and contributes to 1 percent of gross domestic product.

In the nine months result, up to June 30, the bank reported a $NZ478 million profit, down 43 percent as compared to the last year; and for the local subsidiary the profit was reduced to $561m from the $960m during the previous year.

The profit before provisions was higher by 14 percent, mainly due to a 69 percent increase in the profit from the institutional bank.

These profits include the markets trading divisions of banks, as banks are known to make money when markets are explosive.

Australia's ANZ, in May, had forecast a 20 percent increase in its total credit damage charge during the second half up to September.

ANZ said: "The increase in second-half provisions for the group has been driven entirely by the New Zealand business."

During the 2009, provision charge for New Zealand is going to be three times the last year's provision of $NZ302m.

A single "trade finance" of the New Zealand business accounts for 8 percent of total year-to-date provisions. An ING New Zealand settlement costs the bank $147m after tax.

The provisions of the ANZ National for the nine months to June 30 were $532m, up from $167m as in the last year.

According to the Australian parent bank, more than 40 percent of year-to-date New Zealand provisions were from the commercial and institutional, where as 44 percent was from retail, and 8 percent from the rural.

ANZ National Chief Executive, Jenny Fagg, said: "The bank remained well capitalised and had secured $10 billion of funding through the sale of mortgage assets to its parent."

The bank is likely to achieve 4 billion in new lending to farms and businesses, as targeted.

The good performance of the institutional business has been more than the previous periods and is also above the current levels.