Teachers Mutual Bank suffered a 20.6 per cent fall in net profit in the year to June, as a result of a significant increase in its interest expense and administration costs.Net profit was $23.1 million, compared with $29.1 million the previous year. Interest revenue increased from $227 million to $249 million, but interest expenses rose from $137 million to $159 million. General administration expenses rose from $69.9 million to $78.9 million.Impairment losses also rose - from $2.1 million to $2.5 million.Loans and advances to members increased 11 per cent to $3.1 billion and retail deposits increased 8.6 per cent to $3.4 billion.Teachers completed its transition from a credit union to a mutual bank during the year, which accounted for some of the increase in expenses.Teachers Mutual Bank's chief executive, Steve James, said in a statement that investment in IT capacity, as well as increased capacity in member services, risk management and financial management, also added to costs.James said there was no impact on the bank's liabilities following the Government's reduction in the deposit guarantee. As a consequence, Teachers will return its liquidity (currently 18.85 per cent) to more normal levels.