Macquarie Group's return to retail banking has yet to do much for its bottom line. Higher expenses have offset growth in income in the group's banking and financial services division, whose profit contribution in the six months to September was down on the previous corresponding period.Macquarie's Australian mortgage portfolio grew by more than 20 per cent, to A$14.6 billion, in the 12 months to September.  Net interest and trading income in the six months to September was $366 million - an increase of 18 per cent over the previous corresponding period, and 11 per cent up on the March half-year.The division also includes the group's Australian retail brokerage business, investment platforms and some of its business banking activities. Brokerage and commission income was flat and platform fees fell.Operating expenses were 4.7 per cent higher than in the previous corresponding period. This was due to increases in brokerage and commissions, and increased technology investment.Despite the mixed results, the group is pushing ahead with its return to retail banking. Its medium-term outlook includes an expansion of intermediary business in the Australian mortgage market.It will also continue to pursue growth in business lending, and easing in the corporate and asset finance division.