The pace of profit recovery for Westpac New Zealand is lifting, as better margins and a further fall in the charge for bad debts improve the bottom line.The bank provided a mainly discursive update on one arm of its NZ business yesterday that was thin on fresh financial data.For instance, management said that margins continue to improve but did not elaborate. The bank also said that impairment charges continue to moderate but also did not elaborate on this.One fragment of data provided was that the proportion of home loans in arrears by days or more at June 2011 was 72 basis points, down eight basis points from March.The bank also said that its Westpac New Zealand division had doubled its return on equity in the past two years, from about eight per cent to around 15 per cent.The Westpac NZ disclosure document for the March 2011 half year, however, shows the ROE to be only nine per cent.On the other hand, Westpac's incorporated business in New Zealand will now include a range of high margin activities from the wholesale bank that were previously managed under Westpac's foreign bank branch.Those activities include deposits, transaction banking and lending for institutional customers; debt capital markets, including loan syndication and securitisation (but excluding debt distribution), and also corporate advisory.In May, Westpac said the revenues for these businesses in the year to September 2010 were NZ$180 million and the net profit was NZ$115 million.The bank also mentioned productivity improvements and new marketing efforts aimed at affluent customers.One theme of the update is the bright outlook adopted by Westpac in respect of the New Zealand economy thanks to the improved terms of trade.The bank did not update its estimate for credit losses from the earthquakes in Christchurch, which, in March, it estimated would be in a wide range of between NZ$30 million to NZ$100 million.The bank did say, though, that the impact of the earthquakes on the economy as a whole was "proving to be less than initially expected".