New Zealand's largest and smallest home-lending banks both increased profits sharply in the December quarter, although both lost ground in the mortgage market.ANZ Bank's New Zealand subsidiary ANZ/National Bank's net profit jumped 27.7 per cent to NZ$350 million in the quarter, boosted by a number of one-off items including the sale of the FleetPartners business.The bank says underlying profit before provisions was up eight per cent to $423 million and revenue also grew eight per cent.The bank's mortgage book grew NZ$1.33 billion to NZ$44.86 billion in the three months. But its market share slipped to 34.6 per cent compared with 34.8 per cent at the end of September and 34.5 per cent at the end of December 2005, using Reserve Bank figures as a proxy for the market.TSB Bank's net profit rose 14.7 per cent to NZ$8.63 million, bringing its nine-months result to NZ$26.7 million, an 11.3 per cent increase on the same nine months a year earlier.Its mortgage book grew NZ$17 million to NZ$1.61 billion in the latest quarter, compared with NZ$1.49 billion in December 2005. That meant its market share fell to 1.24 per cent in December 2006 from 1.28 per cent in September and 1.3 per cent in December 2005.TSB managing director Kevin Rimmington said despite the fall in market share, his bank's growth in lending is at record levels but loans are also being continuously repaid - the figures in the bank's quarterly disclosure documents are net figures.Rimmington said TSB has had the lowest two-year fixed mortgage rate in the market for five or six months now, undercutting the National Australia Bank-owned Bank of New Zealand's "unbeatable" campaign. While BNZ's advertisements feature pigs, TSB's show a smashed china pig with the slogan: "We've beaten the unbeatable … again."Reserve Bank of New Zealand figures for January released yesterday show mortgages written by registered banks rose NZ$1.47 billion to NZ$131.07 billion in the month. That's up from the NZ$1.32 billion increase in December and compares with $116.12 billion in December 2005.