For the first time in four years, ANZ New Zealand made no collective provision for loan impairments because of moderating risk levels across its businesses.This and a fall in individual provisions resulted in ANZ NZ posting a 40 per cent rise in underlying profit, in the full year ended September 2010, to NZ$882 million.Loan impairment provisions fell 48 per cent, to NZ$461 million, from NZ$890 million the year before, as collective provisions dropped to zero from NZ$271 million in 2009. Individual provisions fell 25 per cent, to NZ$461 million, as loss rates declined in the commercial and retail sector, and because of recoveries in institutional loans from a single name exposure that was provisioned in 2009. This was partly offset by an increase of NZ$32 million in rural loans.ANZ NZ said its total loss rate, which is a total provision charge as a percentage of average net advances, was 0.48 per cent in 2010, down from 0.91 per cent the year before.The reduction in provisions, however, contrasts with the rise in net impaired assets, which jumped 97 per cent during the year to NZ$1.46 billion, from NZ$743 million in 2009. New impaired loans as a ratio of new advances thus spiked to 1.49 per cent from 0.73 per cent.Improvement in net interest margins also contributed to the increase in profit. NIM rose 10 basis points to 230 bps for the full year, with the major improvement coming in the second half, when margins rose 18 bps.ANZ NZ's operating income fell 20 per cent or NZ$184 million to NZ$738 million, mainly due to a fall in income from markets as trading conditions were less favourable compared with the year before.  The removal of exception fees, in December 2009, reduced fee income by NZ$57 million. These were partly offset by a stronger contribution from INZ NZ.ANZ NZ customer deposits fell 0.3 per cent in 2010, to NZ$59.7 billion, despite the bank adding a whopping NZ$1.5 billion in deposits in the final quarter ending September.Net loans fell one per cent, to NZ$96 billion, as rises in overdrafts were more than offset by a fall in non-housing and credit card loans. Housing loans were almost unchanged.