A reduction in the net interest margin of 25 basis points ate into the net profit of bankmecu in the year to June 2013.Its net profit fell A$1.6 million, or six per cent, to $25.4 million. The mutual bank's return on assets fell to 0.86 per cent, from 0.99 per cent.bankmecu's margin squeeze eased over the second half, given that in the first half its margin fell 28 basis points.Loan demand may also have eased in the second half. The bank said it funded $499 million in new loans over the last year, a rise of 15 per cent.  Most of this flow was in the first half of the financial year.Total assets increased by only half this rate, however, to $3.04 billion. bankmecu said loan growth was "impacted by the decision customers are making to pay down their debt more quickly in a low interest rate environment."Another factor highlighted in a media release summarising its financial statements was "competitive pricing by the bank for deposits and loans, and the impact of falling interest rates."The bank said customer deposits grew by 5.6 per cent, while loans increased by 4.4 per cent. Deposit growth was below system and loan growth close to system.Damien Walsh, managing director of the bank, said in a statement that the bank had adopted "a responsible approach to banking, whereby the Bank will not trade off credit quality or financial performance to achieve above system growth."