National Australia Bank will pare back its interest-only lending from 41 per cent of recent flow to within APRA's 30 per cent cap by late this year, Andrew Thorburn, the bank's managing director said yesterday.An acceleration in NAB's interest-only home loans around this time last year, highlighted in an investor presentation yesterday, may single out the bank's past risk appetite as one of the factors behind APRA's intervention in late March."We have sufficient time to moderate the flow," Thorburn said, noting that the expectation by APRA was for its interest-only cap to be met by the last quarter of this year.The bank is making more use of a "differentiated pricing structure based on loan purpose and repayment type," the bank said, with more "on the spot pricing", and an aversion in higher risk postcodes and for low deposit loans.In a deviation from routine, Thorburn told one analyst: "If we were concerned about credit quality, we would run at less than system, no problem at all."In fact, after a number of months of below system growth late last year, NAB achieved above system growth since January.