A slide in business and consumer confidence, a slowing housing market, and the prospect of tougher regulation have done nothing to dent the profitability of the country's banks.
The latest quarterly KPMG survey of the banking and finance sector shows collective profits for the 20 registered banks hit a record last year, rising 11 percent to $5.77 billion from $5.19bn in 2017.
The head of KPMG's banking and finance section, John Kensington, said the rebound in profit was a reflection of the strong local economy, but he warned there were challenges looming.
"A big question hovering like a black cloud over the sector is whether the banking sector is at some sort of crossroads and facing some of the most challenging times it ever has."
Some of the things set to test the sector are the outcome of the joint Reserve Bank/Financial Markets Authority investigation into the culture and conduct of the banking sector.
The inquiry cleared the sector of misbehaviour or unethical practices, unlike the inquiry into Australia's banking sector, but gave the major banks until the end of next month to detail how they plan to improve their treatment of consumers.
Mr Kensington said the creation of systems to monitor behaviour and customer satisfaction had not been done before, and would leave the banks in the position of having to devise something new while maintaining their current businesses.
He said on top of that a raft of law changes for consumer finance, credit contracts and insurance were looming which added to the pressure.
However, he said the most significant challenge facing the sector was the Reserve Bank's proposal to make banks hold more cash in reserve to cope with a major financial crisis.
"The consultation paper is probably the most worrying of all the challenges the banks face, not only because it overlays the existing challenges but also for its potential downstream events," Mr Kensington said.
Among the consequences were the potential for higher lending rates, lower deposit rates and credit rationing, which would hit many industries and likely slow the economy.
Banks in fine fettle at present
The KPMG survey showed the top banks enjoyed growth in net interest income, higher margins, lower cost of doing business, and a modest rise in bad debts.
ANZ remained the biggest bank, with close to a third of the sector's assets, the biggest loan books and customer deposits, and the highest profit.
ASB cemented itself in second place, with Westpac and BNZ rounding out the top four. Among them the Australian-owned quartet have more than 80 percent market share.
The best performing New Zealand-owned bank was Kiwibank, which bounced back from a weak 2017 when it wrote off a large amount on a computer-software upgrade.
The survey also showed that the main banks shed more than 200 staff, had 44 fewer branches, and slightly fewer money machines.