A cut in costs thanks to a savings drive is the main factor supporting a rise of six per cent in ANZ's cash profit, to A$1.53 billion, in the December 2012 quarter.In a briefing on Friday, ANZ management Friday cited "momentum from productivity programs" and "further productivity gains" as a key focus.Shayne Elliot, the bank's chief financial officer, told an investor call on Friday that staffing levels were down by two per cent across the group on a full-time equivalent basis. He said the bank's cost-to-income ratio had improved 18 basis points. Elliot said costs would fall over the first half of 2013, when measured on a cash basis, and would be flat when measured on an underlying basis, "with a further improvement in the cost-to-income ratio."Revenue growth may be picking up, with ANZ claiming gains in market share in home loans and commercial lending in Australia, and also growth in commercial assets more generally. Trade finance also picked up over the quarter, continuing a theme at ANZ.ANZ said it expected its group net interest margin to be "broadly flat compared to the end of September". The group net interest margin, including global markets, for the second half of 2012 was 228 basis points. Group NIM, including global markets, at the end of September 2012 was 225 bps.ANZ's APRA Basel III core equity tier-one ratio was 7.7 per cent at December 2012, which the bank put at 9.7 per cent "on a fully harmonised basis, unchanged from the full year 2012."Mike Smith, ANZ's CEO, said the bank's CET1 measure of capital was "about right"."We've been capitalised very substantially in anticipation of Basel III. It's like moving in the dark, no-one knowing how much is required or not."There's still a huge amount of uncertainty. European and American banks have got a long way to go to reach our levels."We don't want to cry too much. I am very conscious of the dilution to ROE, so we have to be very careful."On regulatory policy concerning liquidity targets Smith said: "The whole liquidity issue under Basel III is still very much up in the air. That's not to say Asia and Australia will not implement [the standards] sooner."We are as liquid as the balance sheet at the bank has ever been in our history."