Preheat oven to 170ºC conventional or 150ºC fan-forced. Grease and line a 20cm square cake pan with baking paper.

Put margarine spread or butter , sugar and vanilla in a medium saucepan. Stir over a moderate heat until it melts. Remove from heat.

Stir bananas into butter mixture. Add egg, flour and milk; stir to combine. Mix in walnuts. Poor into prepared pan and smooth surface. Bake for 30 minutes or until a skewer inserted into the centre comes out clean. Cool in pan for 10 minutes, then turn out onto wire rack to cool completely.

To make frosting: combine 50g margarine spread or soft butter, icing sugar and cream cheese into a medium bowl and beat with an electric mixer until smooth. Spread frosting over the top of the cooled cake.