A surge in other operating income and a small fall in the impairment provision led to improvement in ANZ National's profitability in New Zealand in the recent quarter.ANZ National posted a net profit of NZ$610 million for the nine months ended June 2010, compared with NZ$367 million in the six months to March period, and up from NZ$561 million in the same period the year before. In the June 2010 quarter alone, ANZ made a net profit of NZ$243 million, which is double the NZ$124 million it made in the March three-month period.  The fluctuation in profit is mainly due to the variations in other operating income. ANZ made NZ$191 million from other operating income in the June quarter, NZ$104 million in the March quarter and NZ$186 million in the December 2009 quarter.A small fall in impairment provision also contributed to improvement in profit in the June quarter.  Provision for the June quarter stood at NZ$78 million, compared to NZ$169 million in the March quarter.One feature of the quarter was the NZ$1.2 billion growth in funding, all of which came from an increase in commercial paper while certificates of deposit and customer deposits fell.Commercial paper issuance rose sharply to NZ$10.3 billion, up 39 per cent from March, while certificates of deposit fell to NZ$3.28 billion, down 17 per cent. Total customer deposits, including demand and term deposits, fell NZ$1.04 billion during the June quarter. Net loans rose to NZ$86.1 billion, up 0.5 per cent from March.ANZ's balance sheet continued to shrink in the latest quarter with total assets dropping to NZ$113.3 billion, compared with NZ$113.6 billion in March. The extent of the fall was, however, not as big as the shrinkage seen in the first six months when total assets fell from NZ$117.9 billion at the start of the financial year.