With credit demand sluggish and margins under pressure, ANZ was unable to produce any growth in net interest income in the six months to March. The bank relied on other sources of income to generate a positive result for the half.The bank reported yesterday that net interest income for the March half was A$5.6 billion - almost unchanged from the September half and up eight per cent on the previous corresponding period.The result was boosted by other operating income of $2.9 billion, which was up four per cent on the previous half and 49 per cent on the previous corresponding period.The main sources of other operating income were offshore markets' business, particularly in the Asia Pacific region.ANZ chief executive Mike Smith said the banking sector and the general economy were facing a "difficult environment".Smith said: "Parts of the Australian economy have clearly hit a flat spot, with consumers and businesses becoming more conservative after the financial crisis, and being reluctant to spend in an uncertain economic climate.  And this has been compounded by the impact of the floods in Australia, particularly in Queensland, and in New Zealand by the earthquakes."The bigger picture is that we're starting to see the effects of a major structural change that's underway as the Australian economy continues to shift towards being much more based around hard and soft commodities.  And I don't think the magnitude of this shift is fully understood, nor its implications for industries like manufacturing, tourism and retail. "Business models are clearly going to have to adapt to a lower margin, lower growth environment."The bank's net profit was $2.6 billion - up three per cent on the previous half and 38 per cent on the March half last year.After adjusting for non-core items, such as valuation adjustments, tax on New Zealand conduits and hedging losses, the bank reported an underlying profit of $2.8 billion - up three per cent on the previous half and 23 per cent on the previous corresponding period.Net loans and advances increased seven per cent on the previous corresponding period and two per cent on the September half. Retail lending assets in the Australian business were up 10 per cent for the year to March, but commercial lending assets grew just four per cent.Return on equity increased from 15.5 per cent last September to 15.8 per cent in the latest half (ROE was 16.7 per cent on an underlying basis). Return on assets was 1.02 per cent.The bad debt charge was $675 million, compared with $705 million in September, and $1.1 billion in March last year.Net impaired assets were down nine per cent from the previous corresponding period to $4.5 billion. The value of new impaired assets rose in Australia as a consequence of the floods and storms in Queensland.The group net interest margin moved up from 2.45 per cent in March last year to 2.5 per cent in September, and back down to 2.47 per cent in the latest half.