Suncorp chief executive Michael Cameron said Suncorp Bank would be lucky to hold its net interest margin at the current level of 1.86 per cent, despite the bank's decision to pass on only ten basis points of this week's 25 bps reduction in the cash rate.What the bank has gained on the lending side it may lose on the deposit side. Like a number of other banks, Suncorp Bank has increased some of its term deposit rates. Cameron said financial institutions had "an appetite for deposits." From 2018 they will have to meet new net stable funding ratio rules, which will involve holding higher levels of deposits.The bank made a net profit of A$393 million for the year to June - an increase of 11 per cent over the previous corresponding period.The bank's net interest income rose 2.4 per cent year on year to $1.1 billion, while non-interest income fell 17.8 per cent to $88 million. Expenses were cut by 1.1 per cent to $639 million. The cost-to-income ratio fell from 53.4 per cent in 2014/15 to 52.5 per cent in the latest year.Impairment charges were just $16 million - down from $58 million in 2014/15. The impairment loss represented three bps of gross loans and advances.Suncorp has previously said the impairment would track between ten and 20 bps of gross loan and advances through the cycle, so it would be hard to see the bank improving on the latest impairment result.Lending assets grew 4.5 per cent and the mortgage book grew by 5.9 per cent, which was below system growth of 6.7 per cent.Suncorp chief financial officer Steve Johnston said the bank had tightened its loan serviceability criteria during the fist half and that had cost it some share.In the second half it returned to system growth with some campaigns and an accelerated approval process.Cameron said the goal was to have the bank grow its mortgages at or above system.The commercial loan portfolio was flat during the year. The bank had been running off parts of the portfolio and that process has been completed, with a reduction of about $8000 million of small and medium business loans.Johnston said that in the second half the business loan book started to grow for the first time in a number of years."The quality of the book is better and now it back to growth. The change in the lending mix will help our margin," he said.The bank's common equity tier one ratio rose from 9.15 per cent to 9.21 per cent.Cameron said regulatory approval of its move from a standardised approach to setting risk weights for regulatory capital purposes to an advanced approach was imminent."We have been operating as an advanced bank for some time. We hope to get a response from the regulator by the end of the year," he said.