Bank profitability hit an eight-year high in the December quarter when measured by net interest margin.

According to Reserve Bank data, banks’ net interest margin rose by 6 basis points, to 2.37 per cent. The margin last reached this level in December 2014.

NZ Herald Wellington business editor Jenee Tibshraeny says the net interest margin is just one way of measuring bank profitability, with return on equity and return on assets.

Jenee Tibshraeny says as interest rates have risen, it's taken savers longer to put money back in term deposits. These pay more interest than regular savings accounts and contribute to higher margins.

LISTEN ABOVE