Banking analysts have sent out notes to clients alerting them to the two key issues in this week's interim financial reports from ANZ, National Australia Bank and Westpac: margins and credit quality.Macquarie Securities said margins were likely to have benefited from mortgage repricing in October and November last year but tighter funding costs could negate those benefits."We expect the widening bank bill to overnight indexed swap spread and ongoing competitive pressures to partially offset repricing benefits. We see downside risk from higher funding costs in future period," Macquarie said.Morgan Stanley banking analyst Richard Wiles said: "The benefit of home loan re-pricing last year has been offset by higher wholesale funding costs and robust competition, meaning margins could miss forecasts."Wiles said: "We expect margin expansion in retail banking but a decline in business and institutional banking."On credit quality, Wiles said single name (corporate) exposures were likely to push up loan losses and impaired asset balances.Macquarie said weakness in the resources sector, as well as New Zealand dairy, was likely to pressure bad debts.