ING Direct Australia suffered a nine per cent fall in net profit in 2012, which it said was because of high funding costs in the first half of the year. Yesterday, the bank reported a net profit of A$276.9 million for the 12 months to December. Its net interest margin fell from 134 basis points in 2011 to 122 bps last year.The bank has been on a drive to increase the proportion of funding it derives from retail deposits. Last year it increased retail deposits by 10 per cent. According to Australian Prudential Regulation Authority figures, ING Direct's mortgage portfolio increased by just 0.5 per cent over the same period (and shrank by 0.6 per cent in the six months to December).ING Direct's chief executive, Vaughn Richtor, said the emphasis on building the bank's retail deposit base would continue. At the moment, the ratio of deposits to loans is 69 per cent (up from 64 per cent in 2011) and Richtor aims to get it up to 90 per cent."For the time being we will continue with modest growth in mortgages," he said.He said the bank would focus on achieving growth through its wider product set. Last year it launched a superannuation account, Living Super, which had 9335 customer accounts at the end of March and $223 million in funds.Richtor said this was a bit more than his superannuation team had budgeted for in its business case. Of the 9335 customers, two-thirds were existing ING Direct customers and the rest were new to the bank.He said the bank had also done good business with its transaction account, Orange Everyday, which had a 50 per cent increase in account openings last year.