The drag to profit from corporate loan defaults is robbing ANZ of the recent, though short-lived, revival in its earnings in New Zealand.After nearly halving in the December 2009 quarter, loan impairment provision rose again at ANZ's New Zealand business in the March 2010 quarter.Impairment provisions increased to NZ$179 million in the March 2010 quarter from NZ$151 million in December 2009. This, combined with a fall in other income, resulted in an underlying profit contribution of only around NZ$119 million from the March 2010 quarter in the half year's profit of NZ$372 million.ANZ New Zealand has warned that risk in its corporate portfolio, including rural, will continue to weaken in the second half."Business conditions have stabilised but more time is required for the full credit impacts of the downturn to work through," ANZ said in relation to its corporate and commercial banking businesses. For the retail sector, it said credit quality is showing signs of improvement.The balance sheet shrank during the period with both net loans and deposits down one per cent from September, and down three per cent from the year before.