ANZ boss Mike Smith says his bank hasn't relaxed its rules for home borrowers as the residential property market heats up.
Despite strong rises in capital city house prices in recent months, Mr Smith says the nation is not experiencing a housing bubble.
Sydney's market is fuelling the rise, while Melbourne, Perth, Brisbane and Canberra have also experienced strong growth.
Mr Smith says the bank's lending record speaks for itself.
"We haven't lowered our standards," he told ABC TV.
"Over the last few years we've maintained credit standards very well.
"In fact our impaired assets were 20 per cent down year on year."
Media commentators liked to speculate about recessions and asset bubbles, Mr Smith said.
"Most of the time everything is between," he said.
"We're a long way from a bubble. There has been an adjustment back, in terms of the market.
"We saw it come off during the crisis and move down and then a gradual stability period and now it's just edging up a little bit."
Reserve Bank governor Glenn Stevens recently said it was "very important" that strong lending standards remain in place, and that decisions be based on sensible assumptions about future returns.
Mr Smith said ANZ had been cautious with its credit standards, putting a greater buffer into the stress testing for potential borrowers.
The bank factors in interest rate increases of up to 2.5 per cent when assessing the risk of its loans.
"When you've got rates at an all-time low you've got to say `what happens when they start to increase'," he said.
ANZ last week lifted its cash profit to a record $6.5 billion in the year to September 30, up 11 per cent from the previous year.
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