Wellington, Apr 24 (IANS): New Zealand's registered banks reported combined profits of 3.3 billion NZ dollars ($2.68 billion) last year, despite the fact that borrowing continued to be slow, according to a survey out Tuesday.

The KPMG Financial Institutions Performance Survey (FIPS), which analyses the performance of New Zealand's registered banks, showed combined net profits after tax were the "highest seen in recent times" rising from 2.77 billion NZ dollars in 2010, reported Xinhua.

John Kensington, KPMG head of financial services, said the "deleveraging trend" that began in 2010 showed "no clear sign of abatement" and could continue into 2013 and beyond.

The trend was driven by a softening of business confidence and concerns about slowing demand from China and Europe, said Kensington in a statement.

New Zealanders who had money available were not yet ready to spend and those without were reluctant to borrow, he said.

"For many, the global financial crisis was a wake-up call and people are now far more concerned about their debt levels and less likely to increase borrowing."

New Zealand's saving record was woeful, so the deleveraging trend was the only positive outcome from the global financial crisis.

The results pointed to an improvement in asset quality with reductions in bad debts.

The New Zealand Bankers' Association said the survey showed New Zealand had maintained a strong, stable and highly competitive banking sector in a globally uncertain environment.

"Our banks are well placed to face the coming challenges, which include higher cost of funds, increased regulatory costs, and continued low credit growth," association chief executive Kirk Hope said in a statement.