One of the hot topics during recent reporting seasons has been the proposed link between banks' cost of funds and its impact on loan rates. However, the topic hardly rated a mention during the results presentations of the past couple of weeks.Westpac's chief financial officer, Phil Coffey, provided the most detailed breakdown, saying that high deposit costs were being offset by higher loan spreads.In the March half-year, asset re-pricing added seven basis points to Westpac's net interest margin, while changes in the pricing of customer deposits cost four basis points of NIM. In the September half-year, asset re-pricing added three basis points of NIM, while customer deposits cost two basis points.According to PwC's analysis of the results, asset re-pricing added an average of eight basis points to margins, and price competition for deposits reduced margins by six basis points.Coffey also said that for the first time since the financial crisis wholesale funding costs dropped sufficiently to provide a benefit to the bank's margin. Lower wholesale funding costs added three basis points to the margin in the September half-year."However, this benefit was more than offset by the drag from holding more liquid assets and from lower returns on interest rates, which we earned on both our capital and on our low-interest balances," Coffey said. "I think these two offsetting factors are likely to continue at least into the first half of 2014."According to KPMG's analysis of the results, customer deposits as a percentage of loans stand at 75.1 per cent. KPMG said strong competition for deposits was likely to persist, given the Basel III requirements for liquidity coverage and stable funding.National Australia Bank reported that its weighted average cost of term wholesale funding peaked during the 2012/13 financial year at around 140 basis points over the bank bill swap rate. Current pricing of term debt is at margins of around 60 to 80 basis points for three-year term funding and around 100 basis points for five-year term funding.The bank has forecast that if the pricing of new issuance remains at the current level its weighted average cost of term wholesale funding will fall below 130 bps by 2016.But if pricing goes back up to 145 basis points the weighted average cost would start to rise again.