Bank of New Zealand, the local unit of National Australia Bank, has suffered a net loss of $181 million led by its failure to win tax case worth $661m.

Andrew Thorburn, the Chief Executive of BNZ said that the bank registered a strong performance during the first half of the current financial year reporting a profit of $703m.

Bank's net interest margin declined 29 basis points to 2.13 per cent while provisioning bad and doubtful debt surged to $185m. Mr. Thorburn said, "We are emerging from a tough year with a sound balance sheet, good asset quality and strong capital ratios."

BNZ is optimistic to register 2 per cent growth in next two year reaping the benefits of improving market conditions. Mr. Thorburn said that that past period remained challenging for the financial segment but overall results for the fiscal 2009 were satisfactory given to the tough conditions faced by National Australian Bank whose annual profit declined 42.9 percent led by low recovery and bad debt charg gess.