Kiwibank's gross impaired assets jumped nearly 38 per cent in the three-month period to September 2010, as corporate impaired loans more than doubled and residential mortgages saw more impairment. Gross impaired assets rose to NZ$52.1 million, up 38 per cent at the end of June. Corporate impaired loans surged to NZ$24 million, from NZ$11.3 million, as another NZ$14 million in impaired loans was added to the category. Kiwibank's corporate impaired loans have been volatile in the past few quarters, and at the end of the March quarter total corporate impaired loans had reached NZ$40.7 million. However, the June full-year result showed a drop back to NZ$11.3 million, indicating a lot of transfers happened in the last quarter of the June financial year, including recovery of bad loans that were written off. This increase in impaired loans has forced Kiwibank to make a substantial increase in provisions in the last quarter, of NZ$9.5 million. This is up from NZ$5.5 million in the same period last year and compares with NZ$17.9 million for the full year ending June 2010. Total impairment losses also surged, to NZ$27.3 million, from NZ$20.2 million at the end of June. The rise in impairment provision and the decline in gains on financial instruments were the chief reason for Kiwibank's fall in net profit, which dropped to NZ$8.7 million, from NZ$13.9 million in the corresponding quarter of 2009. Deposits fell marginally during the quarter, while loans and advances rose to NZ$10.7 billion, from NZ$10.4 billion. Increased loans seemed to be funded from debt securities, which rose to NZ$926 million from NZ$795 million.