The fierce competition for retail deposits is wearing down the profits of Kiwibank. The New Zealand government-owned bank yesterday reported that profit for the full year to June 2010 fell 13 per cent to NZ$45.8 million.A rise in operating expenses and an increase in impairment provision also contributed to the decline. Net interest income also fell to NZ$133 million, down 18 per cent, but this was offset by an equal increase in other income. This was the first time since at least June 2004 that the bank saw a fall in net interest income, and pressure on net margins was blamed on the fierce competition for retail deposits.