The New Zealand arm of ANZ's net profit for the three months ended June has fallen by 10 percent or $40 million on the previous quarter to $351m.
It also put aside $79m to cover bad and doubtful debts, on top of the $233m it set aside for the first half of the year.
ANZ chief financial officer Stuart Taylor said the bank's performance had been solid given the economic blow dealt by the pandemic, but he expected bad debts to increase further before the end of its financial year.
"The outlook on this will depend to a large extent on the economic recovery and to some extent that will depend the length of this second lockdown and what that means," he said.
"We also have to consider more widely what happens to the global recovery. You'd have to say we'd see an increase on this number when we come into the end of the financial year."
ANZ customer deposits increased by 2.1 percent to $115.8 billion in the quarter, but said it was well capitalised.
It also issued $7.4b in new consumer and business loans during the quarter, but gross lending was flat at $136b.
Taylor said banks were ready and willing to lend but they also had to make sure they were lending to people who had the means to pay it back.
ANZ said it had provided financial support to 39,000 personal, home and business loans customers through deferrals, adjustments and restructures, with just half of those covering home and personal loan repayments worth about $5.6b or 6 percent of the bank's home lending.