Bad debt expenses are down, but not by much, and there was no real improvement in asset quality at National Australia Bank in the December 2010 quarter.In a trading update, released yesterday, NAB said its cash earnings were around A$1.3 billion for the December 2010 quarter, up slightly from a run rate of $1.2 billion each quarter over the 2010 financial yearThe bad debt charge for the quarter was $493 million, around $70 million less than the quarterly average in the bank's 2010 financial year but only around $20 million less than the average in the last two quarters of the year.The December quarter bad debt charge includes $25 million, described as an economic overlay, to allow for a rise in impaired loans arising from the Queensland floods.Asset quality improved, just, across the group, with the ratio of loans 90 days or more past due plus impaired assets easing to 1.86 per cent in the December quarter, from 1.88 per cent in the September quarter.This was mostly a function of the rapid growth in home loans in Australia, and improved collections in New Zealand on the credit card portfolio.Asset quality in all business units other than personal banking in Australia worsened over the quarter, NAB said.In business banking in Australia, the ratio of loans 90 days or more past due plus impaired assets increased to 2.21 per cent, from 2.16 per cent.At Bank of New Zealand this ratio increased to 1.87 per cent, from 1.75 per cent.BNZ said it managed to grow its market share in home loans, agribusiness and deposits during the quarter.At Clydesdale Bank, in the UK, this ratio increased to 3.34 per cent, from 3.15 per cent.Mark Joiner, finance director, told an investor briefing that the bank's net interest margin for the quarter "was a little lower than the second half of '10 average, although level with the fourth quarter [of 2010], at 221 basis points."NAB changed tack in its presentation of some market-share data.The bank put its market share in home loans in Australia at 13.6 per cent and its growth in market share at 31 basis point over three months, which is three times the rate of growth reported using APRA data. NAB said it included some home loans originated through the business bank in working out its market share.On the other hand, NAB reported its business banking market share as being in line with APRA definitions.Over the past year or so, NAB had added in some additional loans not treated for APRA reporting purposes as business lending.