Commonwealth Bank chief executive Ralph Norris said he was "not happy" with the performance of his branch network despite picking up share in home and business lending, and household and business deposits.Commonwealth updated the market yesterday on its performance in the March 2008 quarter, revealing that the "flight to quality" that has resulted from the credit market liquidity crisis appears to be working in favour of the big banks.Since joining the bank Norris has made it one of his main objectives to turn around the bank's performance in areas such as home loan sales.Compared to system growth in home loan of 2.1 per cent in the March quarter, Commonwealth reported 3.1 per cent growth in home loan receivables. Branches contributed 2.7 per cent growth and brokers contributed 6.3 per cent.Norris said he was pleased that branch sales were growing above system but he added that there was a long way to go. Most of the work on improving branch performance has been focused on the top 150 branches in the network.He said: "The tier two, three and four branches still need to improve significantly. It is a question of resources. You can't do it all at the one time."Commonwealth's premium banking network is still underperforming. It contributed 1.1 per cent growth in home lending in the quarter.Norris said brokers were writing more big bank loans as a number of specialist lenders left the market.Commonwealth home loan share was 18.97 per cent in the March quarter, 0.61 per cent up on the March quarter last year.The bank's share of household deposits was 29.04 per cent, up from 28.77 per cent a year ago.CBA's share of business lending was 12.73 per cent, up from 12.64 per cent, and its share of business deposits was 13.84 per cent, up from 12.46 per cent.Norris said the bank's borrowing costs were still rising, although he expected to report a net interest margin for the second half that was "within spitting distance" of the 2.12 per cent reported in the December half. In the March quarter the bank increased its standard variable home loan rate by 37 basis points over the increase in cash rates. Norris said this meant that the bank had absorbed 10 basis points of additional funding cost on its home loan book in the quarter.  Norris said he expected the bank's cost of funds to continue to rise throughout the year. As term deposits roll over they are being reinvested at higher rates and as wholesale term funding rolls over it is being re-priced at significantly higher rates.In the mix of retail deposits, transaction account balances were down by about $1 billion, investment account balances were up by $4 billion and high-yield Netbank Saver account balances were up by $2 billion.In the wholesale market the bank's cost of two year paper is 75 basis points over the 90 day bank bill swap rate, three year paper is 95 points over, four year paper is 103 points over and five year paper is